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Cramer’s Housing Recovery Play

Housing has bottomed, Cramer said Wednesday, adding that it could soon turn around.

To back his call, the “Mad Money” host pointed to a few positive signs. On its earnings conference call Wednesday, homebuilder Lennar reported a 20 percent increase in new orders and a 35 percent jump in its total backlog. In turn, its stock soared and pushed other homebuilder stocks higher, too, leading the Philadelphia Housing Index to break through a key technical level of $111.

So if housing is to turn around, Cramer recommend investing in indirect housing plays that pay you to wait until the housing market does bounce back. He likes Fortune Brands Home & Security , which makes kitchen and bath cabinetry, plumbing, windows, doors and more. Last year, new construction drove 20 percent of sales while the repair and remodel markets accounted for 35 percent. So even if housing doesn’t bounce back right away, Fortune will still profit from people fixing up their homes.

Fortune’s stock is close to its 52-week high and doesn’t seem cheap because its selling for 22.6 times earnings, but looks like a better deal when you consider it has a 22 percent long-term growth rate. But Cramer doesn’t recommend investors chase this stock. Instead, he suggests waiting for a pullback before buying shares.

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