Cramer’s Spec Stock of 2010?

Is KFN the new SLM?

Cramer during Monday’s Stop Trading! reiterated his call on KFN, the ticker symbol for KKR Financial Holdings , saying he thinks it might qualify as his speculative stock of the year. He wondered if KFN would perform as well as SLM Corp. , better known as Sallie Mae, his winning spec pick of 2009.

In this “crazy” market, Cramer said, dividends offer much-needed protection, so investors should seek them out, even when speculating. And KFN, presently yielding 5%, offers that protection. Click here for Cramer’s full report on KFN.

Elsewhere in the market, Citigroup was up about 3.5% on Monday, thanks to an upgrade to "buy" from "neutral" from Goldman Sachs. One question that has weighed on investors' minds, though, has been the price at which the Treasury Department will sell its stake in the bank. Cramer said he inferred from the report that the government was unwilling to dump its shares at this level, and that’s another reason investors seem less nervous about the stock.

“I don’t think the government’s got a sell order to bang the stock down here,” Cramer said.

Citigroup meanwhile added Google to its "Top Picks" list, but, according to Cramer, only because the share price has dropped so much. What was once a high-multiple name is now a low-multiple one, so now Citi thinks GOOG is inexpensive.

But “that has not worked as a philosophy in this market since the market’s gotten tough,” Cramer said. “That is not enough of a catalyst for me to get behind it for multiple days.”

He recommended investors consider instead, because of its dominance of the search market in China.

Lastly, Cramer said he’s looking for dividend stocks to help ride out the volatility in stocks these days. Specifically, he’s researching real estate investment trusts that yield more than 5%, but that don’t need financing. He said a number of attractive REITs have held secondary offerings from which their stocks haven’t yet recovered. While he hasn’t chosen his favorites yet, those will be coming soon. Be sure to keep checking back to find out who they are.

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