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Cramer's 'Mad Money' Recap: A Clear Cigna to Buy

TheStreet.com Staff

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

Market players need to invest in companies that have big share-buyback programs and that are in the hot nonpharmaceutical health care sector, Jim Cramer told viewers of his "Mad Money" TV show Thursday.

There is one stock, said Cramer, that has both areas covered: Cigna (CI Quote).

"Buybacks protect you," Cramer said. "Nothing is more reassuring than a company that believes in itself."

Because news headlines are so relentlessly negative, they tend to frighten people out of the game. But Cramer said he is not going to join the "bearish chorus," because he doesn't believe it's a good time to flee the market.

"When I tell you there's always a bull market somewhere, I mean it," he said. "Right now, the single biggest bull market is in the nonpharmaceutical health care sector."

On Stockpickr.com, a site owned in part by TheStreet.com(TSCM Quote), there are thousands of different portfolios, Cramer said. One portfolio Cramer wants people to take a look at is Mad Money Buybacks, which is where he said he found Cigna.

Even though Cramer hasn't always been a fan of the stock, it turns out he was wrong to not like it. Not only does Cigna have a great buyback program, but it also is in the nonpharma health care sector.

While most buybacks are "meaningless," Cigna's "is shrinking its share count so rapidly it's practically going private," Cramer said. In fact, since 2004, Cigna has bought back more than 20% of the company.

This kind of buyback does not come along every week, Cramer said. "I would be buying."

Volcano's Worth the Leap

Volcano (VOLC Quote) is a great nonpharma medical device stock that's also a play on the drug-coated-stent controversy, said Cramer. There's debate on the safety of such stents, which are used to unclog arteries.

Because Volcano is a small stock, Cramer urged viewers to use limit orders and preferably to not buy the stock until next week. Cramer said he considers Volcano a defensive stock because people don't stop getting health treatment even if the economy is bad.

Volcano makes intravascular ultrasound catheters, which are used to examine the inside of arteries, he said. Although this IVUS technology has been around for years, it has been underutilized, Cramer continued. But because of the controversy regarding stents, the need for checking out the inside of arteries has increased.

Moreover, Volcano's biggest competitor is Boston Scientific (BSX Quote), which Cramer called the Citigroup (C Quote) of health care.

Volcano also has terrific partners, such as Johnson & Johnson (JNJ Quote), which Cramer owns for his Action Alerts PLUS charitable trust, and General Electric (GE Quote).

Sell Block: Now's No Time for Tech

Cramer dedicated the show's entire "Sell Block" segment to reiterating one point: People need to sell most tech stocks.

"Don't be bamboozled by hopeful analysts," he said. Oracle (ORCL Quote) is not a buy, and even though Cramer said he likes Microsoft (MSFT Quote), it's no secret that its Vista system has been a bust.

Cramer recommended that investors also stay away from EMC (EMC Quote), which recently broke itself up, SanDisk (SNDK Quote), Seagate (STX Quote), Western Digital (WDC Quote) and Komag (KOMG Quote).

In addition, he said he doesn't expect IBM (IBM Quote) to go anywhere until it starts turning out some "breakthrough earnings releases."

Further, nobody should give a hoot about Micron's (MU Quote) recent upgrade, Cramer said.

And while people are at it, they should steer clear of Texas Instruments (TXN Quote), Intel (INTC Quote) and Advanced Micro Devices (AMD Quote), as well, he said.

There are pockets of strength, however, Cramer said. Tech stocks he likes are Garmin (GRMN Quote), Qualcomm (QCOM Quote), Cisco (CSCO Quote) and Hewlett-Packard (HPQ Quote), the last of which he owns for his charitable trust.

Cramer also said he likes eBay (EBAY Quote), Apple (AAPL Quote) and Yahoo! (YHOO Quote), another stock he owns for Action Alerts PLUS.

But he said he's taking IAC/InterActive (IACI Quote) off the buy list.

"This is the wrong time of year to own tech," Cramer said. "Wait for the middle of the summer to pull the trigger on tech."

Medco's a Healthy Play

Cramer welcomed Medco Health Solutions (MHS Quote) CEO David Snow to the show and asked him to explain how his company makes money off drugs that go generic.

"We're rewarded by our customers to manage their health care dollar," Snow said. "To the extent we're successful improving their cost perspective, we make money."

"In the case of generics, $50 billion of branded drugs are going off patent between now and 2011," he continued. "We are going to work very hard to appropriately move people from branded drugs to generic drugs, and we make money doing that."

When Cramer asked what the company is doing with all its cash, Snow said that right now Medco has a $5.5 billion stock-buyback program under way and that it reserves the right to make acquisitions in the future.

Cramer called Medco the definition of a stock people should be buying now.

To view Cramer's interview with David Snow, please click here.

During the show's "Sudden Death" round, Cramer was bullish on Sirius Satellite Radio (SIRI Quote) and Reliant Energy (RRI Quote).

Lightning Round

Cramer was bullish on ABB (ABB Quote), Riverbed Technology (RVBD Quote), Hewlett-Packard (HPQ Quote), Allegheny Technologies (ATI Quote), Gilead Sciences (GILD Quote), Celgene (CELG Quote), Genzyme (GENZ Quote), Investors Bancorp (ISBC Quote), Dean Foods (DF Quote), UnitedHealth (UNH Quote), Cigna (CI Quote) and Level 3 Communications (LVLT Quote).

Cramer was bearish on Gateway (GTW Quote), Titanium Metals (TIE Quote), Sanofi-Aventis (SNY Quote), Quality Systems (QSII Quote) and MedImmune (MEDI Quote).

For more of Cramer's insights during the Lightning Round, click here.

Want more Cramer? Check out Jim's rules and commandments for investing from his popular book by clicking here.