Avon Products Inc. is a safe way to bet on emerging markets, CNBC host Jim Cramer said yesterday on his ``Mad Money'' television program.
China, where the cosmetics company has hired 114,000 sales associates, is becoming more ``shallow, vain and appearance-obsessed,'' giving Avon a possible growth opportunity, said Cramer, a market commentator and former hedge-fund manager.
He warned that risks include poor management and the possibility that China could reinstate a tax on cosmetics. Avon stock rose 39 cents, or 1.2 percent, to $32.97 in trading after the official close of U.S. markets.
In response to a caller, he said II-VI Inc., a maker of lasers for skin treatment, was a worse cosmetics investment than Palomar Medical Technologies Inc.
Shares of Domino's Pizza Inc. are a good buy now that investors, stung by a weak quarter, sold off stock, Cramer said. The pizza chain's troubles probably were the result of poor advertising and an exceptional year-earlier quarter, making it likely that growth will resume, he said.
Domino's share price is about 12 times its estimated next-year's earnings per share, while competitor Papa John's International Inc. trades at 19 times, making Domino's stock more likely to rise, he said.
Domino's rose 43 cents, or 1.9 percent, to $22.93 in after-hours trading yesterday.
Among other restaurants, Cramer said he liked McDonald's Corp. and Panera Bread Co. while generally recommending people be ``tough on the group,'' especially Tim Hortons Inc., Yum! Brands Inc. and Wendy's International Inc. McDonald's rose 6 cents to $34.90 in after-hours trading.
Schering-Plough Corp. is Cramer's favorite drugmaker, he said, noting that he owned shares for his charitable trust. The company, along with Merck & Co., Medco Health Solutions Inc., Rite Aid Corp. and Walgreen Co. are benefiting from a sector rotation out of cyclical companies, he said.
Pharmaceutical companies and drug stores will also likely continue to benefit from the Medicare drug benefit called Part D, which allows consumers to buy treatments they couldn't previously afford, he said.
Schering-Plough rose 9 cents to $20.64 in after-hours trading.
Cramer recommended Florida Rock Industries Inc. and Ashland Inc. because of ``a bull market in rock'' in response to a question during the show's ``Lightning Round'' segment. He said American Express Co. would be upgraded and that the stock would return to $52 a share.
Arrow International Inc. was a good ``slowdown stock,'' he said. CVS Corp. will gain with other drug stores, he said. Altria Group Inc. is poised to gain because its breakup value is higher than its book value, he said. He recommended Memc Electronic Materials Inc. without giving a reason; the shares rose 45 cents, or 1.6 percent, to $29.06 in after-hours trading.