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Cramer's 'Mad Money' Recap: Insourcing Accenture

TheStreet.com Staff

Click here for an archive of Cramer's "Mad Money" recaps.

Genzyme's Mosaic

Genzyme (GENZ Quote - Cramer on GENZ - Stock Picks) is a beautiful mosaic of a biotech stock and is right for this market, said Jim Cramer Tuesday on his "Mad Money" TV show.

Unlike Genentech (DNA Quote - Cramer on DNA - Stock Picks), which focuses on cancer drugs, Genzyme is diversified with drugs to treat all kinds of diseases, said Cramer.

Genzyme's approach is to go after niche markets with little competition where the company can dominate, said Cramer. That approach appears to be working, given the strong third-quarter results Genzyme reported Tuesday.

Cramer still likes Genentech and Amgen (AMGN Quote - Cramer on AMGN - Stock Picks), but Genzyme should be added to the mix, he said.

In response to questions about more speculative biotech plays, Cramer said to stay away -- especially in a market like this -- unless one is just speculating with mad money.

The Accenture Nobody Knows

Following up on a question asked earlier in the show, Cramer said one absolutely should not buy ThermoGenesis (KOOL Quote - Cramer on KOOL - Stock Picks). The company hasn't made any money in six years and its revenues "aren't happening," he said.

Cramer is bullish on Accenture (ACN Quote - Cramer on ACN - Stock Picks) after IBM (IBM Quote - Cramer on IBM - Stock Picks) reported surprisingly good results in its outsourcing and consulting business, he said.

"If IBM's consulting business can do that well ... then Accenture can doubtless do a whole lot better in this market," said Cramer.

Accenture has done a number of things to try to catch the market's attention, he said, including a Dutch tender offer, buying back stock, offering a dividend and beating earnings estimates. "But nobody cares," said Cramer.

Until last week, even Cramer would have recommended Infosys Technologies (INFY Quote - Cramer on INFY - Stock Picks) as the outsourcing play.

But after taking another look at Accenture, Cramer realized that Accenture has Infosys beat, and he believes investors can make a lot more money investing in Accenture, which has a cheaper stock.

At 16 times earnings, Accenture is almost a value play, he said. Cramer likes Accenture as a long-term investment because Accenture is well positioned to be the biggest beneficiary from the huge secular growth in outsourcing.

Amylin Entertainment

Senior MarketWatch columnist Herb Greenberg joined Cramer on the show. Cramer asked Greenberg about Take-Two Interactive (TTWO Quote - Cramer on TTWO - Stock Picks), a video-game stock Greenberg has long been bearish on.

With Take-Two's stock down about 40% from its all-time high, Cramer asked Greenberg, "Don't you think at this level, the mutual funds come in and buy it?"

"Yeah, they'll buy it because they want to make the trade," said Greenberg, but, it's not about the trade, he added.

"This is a company that I see as a one-trick pony, even thought they have a lot of other games. These mutual funds think lightning is going to strike twice with this company."

Estimates are coming down, and even the bulls are throwing in the towel on this company, he said.

Cramer then asked Greenberg why he is so bullish on Amylin Pharmaceuticals (AMLN Quote - Cramer on AMLN - Stock Picks). Greenberg said one of his best sources has been accumulating Amylin from the $14 range to the low $30s and isn't about to sell even though the stock has more than doubled from its 52-week low.

Cramer said he believes that Greenberg is right to be bearish on Take-Two, but in this tough market, Cramer can't resist taking the profits in Amylin, he said, even though long term there may be big money to be made.

Mad Mail

A viewer asked, if Google(GOOG Quote - Cramer on GOOG - Stock Picks) reaches Cramer's $350 price target, should one sell the stock or let it ride? Cramer said he does not believe in letting one's investments ride. He would take profits "until you are finally playing with the house's money."

In response to a question about Dell (DELL Quote - Cramer on DELL - Stock Picks), Intel (INTC Quote - Cramer on INTC - Stock Picks) and Texas Instruments (TXN Quote - Cramer on TXN - Stock Picks), Cramer said his sources at Dell are being cautious.

Intel reported earnings Tuesday after the close which were "not what we wanted" with a "higher inventory number." The stock is "clearly not going anywhere." Texas Instruments is the one to buy, said Cramer.

Commenting on the lack of availability of Apple's (AAPL Quote - Cramer on AAPL - Stock Picks) new video iPod, Cramer said the trade in Apple will work until Apple's new video iPod is available in abundance. After that, it will be time to ring the register.

Of TiVo's (TIVO Quote - Cramer on TIVO - Stock Picks) partnership with Comcast (CMCSA Quote - Cramer on CMCSA - Stock Picks), Cramer said "no can do." TiVo's stock should be sold, he said.

A viewer wanted to know if Microsoft (MSFT Quote - Cramer on MSFT - Stock Picks) is still a good play for Cramer's fourth-quarter tech rally.

Cramer said he does not believe that Microsoft's third-quarter earnings, to be announced at the end of October, will disappoint. Cramer also likes the fact that Rich Pzena, manager of the John Hancock Classic Value fund is buying Microsoft.

"It's the cheapest I've ever seen it," said Cramer. "Two thumbs up. Way up!"

Lightning Round

Bullish

Cramer was bullish on Penn National Gaming (PENN Quote - Cramer on PENN - Stock Picks), Southwestern Energy (SWN Quote - Cramer on SWN - Stock Picks), Cendant (CD Quote - Cramer on CD - Stock Picks), Google (GOOG Quote - Cramer on GOOG - Stock Picks), Bristol-Myers Squibb (BMY Quote - Cramer on BMY - Stock Picks), American Electric Power (AEP Quote - Cramer on AEP - Stock Picks), PNM Resources (PNM Quote - Cramer on PNM - Stock Picks), Duke Energy (DUK Quote - Cramer on DUK - Stock Picks), J.P. Morgan Chase (JPM Quote - Cramer on JPM - Stock Picks), Wal-Mart Stores (WMT Quote - Cramer on WMT - Stock Picks), General Maritime (GMR Quote - Cramer on GMR - Stock Picks), Goldman Sachs (GS Quote - Cramer on GS - Stock Picks) and Altria (MO Quote - Cramer on MO - Stock Picks).

Bearish

Cramer was bearish on Halliburton (HAL Quote - Cramer on HAL - Stock Picks), Sprint Nextel (S Quote - Cramer on S - Stock Picks), Valero Energy (VLO Quote - Cramer on VLO - Stock Picks), General Motors (GM Quote - Cramer on GM - Stock Picks), BioCryst Pharmaceuticals (BCRX Quote - Cramer on BCRX - Stock Picks), Panacos Pharmaceuticals (PANC Quote - Cramer on PANC - Stock Picks), Progressive (PGR Quote - Cramer on PGR - Stock Picks), Knightsbridge Tankers (VLCCF Quote - Cramer on VLCCF - Stock Picks), Dobson Communications (DCEL Quote - Cramer on DCEL - Stock Picks), International Securities Exchange (ISE Quote - Cramer on ISE - Stock Picks), Bancolombia (CIB Quote - Cramer on CIB - Stock Picks) and Revlon (REV Quote - Cramer on REV - Stock Picks).

	1.	Pigs Get Slaughtered		2.	It's OK to Pay the Taxes
	3.	Don't Buy All at Once		4.	Buy Damaged Stocks
	5.	Diversify to Control Risk		6.	Do Your Homework
	7.	Don't Panic		8.	Buy Best-of-Breed
	9.	Defend Some Stocks		10.	Don't Bet on Bad Stocks
	11.	Own Fewer Names		12.	Cash Is for Winners
	13.	No Regrets		14.	Expect Corrections
	15.	Know Bonds		16.	Don't Subsidize Losers
	17.	No Room for Hope		18.	Be Flexible
	19.	Quit When Execs Do		20.	Patience Is a Virtue
	21.	Be a TV Critic		22.	When to Wait 30 Days
	23.	Beware the Hype		24.	Explain Your Picks
	25.	Find the Bull Market