Security Stock Picks Get Boost from Cramer Effect

The stock market inched higher on Wednesday as the Dow Jones Industrial average climbed less than 2 points to close at 10,573. Investor optimism seemed tempered following an ADP report that 84,000 jobs were lost in December. However, security stocks posted strong performances today following several bullish stock picks by Jim Cramer on Tuesday’s Mad Money show.

Here is a review of the performance of Jim Cramer’s key stock picks from Tuesday’s Mad Money show.

Security Stocks
American Science & Engineering (ASEI: 75.71 +0.48%) stock soared 5.8% after Cramer discussed Homeland Security as one of his key investing themes for 2010. ASEI manufactures X-ray equipment for the U.S. government. Cramer sees tremendous potential in ASEI’s products and believes the company has the opportunity to grow their current revenue levels by 10x.

Cramer also highlighted OSI Systems (OSIS: 31.32 -0.70%) as another potential play on Homeland Security. OSIS’s shares closed up 2.6%.

Ford Motor (F: 12.91 +0.70%)
Ford’s stock jumped 3.7% following yesterday’s report that vehicle sales increase 33% in December. While General Motors remained the leader in overall vehicle sales, Cramer warned GM that they had better watch out for Ford which is quickly closing the gap.

Nice Systems (NICE: 32.74 -0.67%)
Shares in Israeli security firm Nice Systems gained 4.5% after Jim Cramer advised investors that the stock represented a great buying opportunity. At its current valuation multiple of only 18x earnings, Cramer believes the stock is a great value.

Cramer’s Lightning Round stock picks:

• Microsoft(MSFT: 29.18 +0.72%) dropped 0.6% – Despite Cramer offering a $35 price target on the stock that currently trades for less than $31.

• Pepsico [[PEP] fell 1.0% – Despite Cramer advising investors to buy the stock “aggressively”.

• Dow Chemical (DOW: 29.40 +1.17%) rose 1.8% – While Cramer believes they overpaid to acquire Rohm & Haas, he believes the company deserves credit for their execution since.