Cramer Picks His Top Managers

So much of stock investing is about hard numbers. Investors track earnings per share, sales and a company’s growth rate, while looking at the macro environment as well. But there’s an intangible element that’s arguably just as important: the CEO. Whether or not Wall Street is willing to pay more for a stock often depends on who’s steering the ship.

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This type of superior management was the reason for McDonald’s better-than-expected quarter on Thursday, Cramer said. CEO James Skinner emphasized innovation, new products, new burgers and international expansion, all of which helped to deliver key top-line growth while others have seen improvements only on the bottom line. MCD finished the day $1.17 higher, doing its part to push up the Dow 132 points.


The same compliments could be paid to any number of great managers: Goldman Sachs’ Lloyd Blankfein, JPMorgan Chase’s Jamie Dimon, Ford Motor’s Alan Mulally and Apple’s Steve Jobs. Money managers consider these company leaders as much as any other part of the business when deciding on which multiple to give a stock.

Add J. Crew Group’s Mickey Drexler to this list. “The greatest merchant of our lifetime,” as Cramer called him, who “has an eye both for fashion and for inventory,” boosted his third-quarter guidance so much today that the stock shot up $5.75 to $43.49, a 15% gain. Strong inventory control and a great clothing line – First Lady Michelle Obama is a fan – have generated the same success for Drexler at J. Crew that he used to turn around the Gap .

Cramer would never tell investors to ignore the balance sheet and a company’s public filings, he said, “But never forget the special sauce” – management – “and how we have to be willing to pay up for the likes of greatness.”

Cramer's charitable trust owns Goldman Sachs and JPMorgan Chase.

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