Jim Cramer: Bare Escentuals, Allergan, Medicis, Avon

Bare Escentuals Inc.'s cosmetics are a fad, making the stock likely to decline, Jim Cramer said on his ``Mad Money'' television program on CNBC.

Cramer, a market commentator and former hedge-fund manager, said the stock was reminiscent of Sealy Corp. in that the initial public offering aimed to make money for a leveraged buyout company, rather than for small investors. Sealy's stock has declined since he recommended it.

Allergan Inc. and Medicis Pharmaceutical Corp. are better investments because the medicines they make, which are injected in order to get rid of wrinkles, are ``more drastic than cosmetics and face less cutthroat competition,'' Cramer said.

Cramer said to avoid cosmetics makers including Estee Lauder Cos., Elizabeth Arden Inc. (RDEN), Revlon Inc. (REV) and Avon Products Inc. (AVP)

International Flavors & Fragrances Inc. (IFF) is a lucrative way to own cosmetics stock because the biggest maker of fragrances lets other companies do the marketing while it provides the products, Cramer said.

International Flavors & Fragrances' 2.1 percent dividend, consistent growth and low ratio of price-to-next-years-earnings made it a good buy, Cramer said. Its customers include PepsiCo, Inc., Unilever NV, Procter & Gamble Co., Estee Lauder and Colgate-Palmolive Co., Cramer said.

In response to a caller, Cramer said to buy shares of Palomar Medical Technologies Inc.

Caterpillar Inc. (CAT) stock has bottomed out and should be bought, Cramer said. He said the company's concerns about slower growth was already priced into the stock before a 10-point drop Oct. 21. He said Cummins Inc. and other makers of products similar to Caterpillar's had more upbeat assessment of their market's future.

Schlumberger

Schlumberger Ltd. (SLB) has yet to hit its bottom, he said. He recommended selling shares of the oil service company. He said investors would be better served moving their money into Halliburton Co. (HAL), which he owns for his charitable trust.

In response to callers, he said to sell shares of Deere & Co. (DE) and to sell United Technologies Corp. (UTX), as he did for his charitable trust.

In a comparison of FedEx Corp. and United Parcel Service Inc., he said that while ``you won't get hurt owning UPS,'' FedEx as a smaller, faster-growing company would rise faster.

Cramer recommended Advanced Micro Devices Inc. (AMD), Symantec Corp. (SYMC), Rite Aid Corp. (RAD), SAIC Inc. (SAI), OM Group Inc. (OMG), Allegheny Technologies Inc. (ATI), Brush Engineered Materials Inc., Rockwell Automation Inc. (ROK), Whirlpool Corp. (WHR), Boston Scientific Corp. (BSX), Johnson & Johnson, Rare Hospitality International Inc., Electronic Arts Inc. (EA), Altria Group Inc. (MO), Life Time Fitness Inc. (LTM) and Level 3 Communications Inc. (LVLT) in response to questions during the show's letters, ``Sudden Death'' and ``Lightning Round'' segments.

Valero Energy

He also told viewers to avoid Secure Computing Corp., Cameco Corp. (CCO) and Valero Energy Corp. (VLO)

He said to hold onto shares of Crystallex International Corp.

He said he owns Johnson & Johnson (JNJ) and Altria Group Inc. stock for his charitable trust.

To contact the reporter on this story: Steven Bodzin in San Francisco at sbodzin@bloomberg.net.

To contact the editor responsible for this story: Aimee Sullivan at asullivan@bloomberg.net.

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