J&J Deal Is a Good Sign

So Johnson & Johnson (JNJ - commentary - Cramer's Take) is not paralyzed. It's buying a company that makes cancer tests, catheters and most importantly implants. I mention the last because that's supposed to be the weakest line of business out there because breast implantation is simply one of the most discretionary purchases that can be made.

That said, this is exactly what should have been happening by now: Mentor (MNT - commentary - Cramer's Take) yielded about 5% going into today and has fallen from $40 despite its profitability. This is one of those companies that had a lot of bad press from breast implants and never really recovered even though it remained one of the dominant players.

J&J tapped into its cash hoard to make the acquisition, another good sign because it didn't want to give away stock down here but had plenty of the wherewithal to make the deal.

Plus it is a sign that J&J, a long-term thinker, believes the economy will eventually make a comeback, and in the interim, Mentor adds some other medical devices that it used to diversify away from just implants.

Allergan (AGN - commentary - Cramer's Take) paid a lot of money during a better time for Inamed, Mentor's competitor.

J&J gets Mentor on the cheap. J&J is a smart company that is not paralyzed.

There will be others behind it.

At the time of publication, Cramer was long Johnson & Johnson.

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