Cramer's 'Mad Money' Recap: Buying Time
TheStreet.com Staff
11/13/07 - 08:00 PM EST
Click here for an archive of Cramer's "Mad Money" recaps.
Tuesday's big market rally demonstrates why people should stay in the game and take advantage of buying opportunities, Jim Cramer told viewers of his "Mad Money" TV show.
"This rally gives us a week worth of good," he said. "We should be higher than we are now a week from today." However, he said the volatile market will swing back and forth, much like it did in the 1990s.
Cramer said short-term investors can make some money in this "treacherous and horrible" market. But he reminded investors not to buy into hope because the market hasn't bottomed yet.
Today's rally was the result of the market being dramatically oversold, he explained. He also said the market received a big lift from good news from such companies as
Corning (GLW Quote - Cramer on GLW - Stock Picks),
Wal-Mart (WMT Quote - Cramer on WMT - Stock Picks) and
Goldman Sachs (GS Quote - Cramer on GS - Stock Picks), which he owns for his charitable trust,
Action Alerts PLUS.
Cramer said he didn't hear anything today which makes him think the forces that lowered the market before won't come back after the market has recovered a bit. He believes stocks will go higher until the market gets overbought.
For now, Wal-Mart's good numbers means that retail gets to win a bit. Cramer said people know he likes
Target (TGT Quote - Cramer on TGT - Stock Picks),
Kohl's (KSS Quote - Cramer on KSS - Stock Picks) and
Costco (COST Quote - Cramer on COST - Stock Picks).
In addition,
GameStop (GME Quote - Cramer on GME - Stock Picks) should do well and
J.C. Penney (JCP Quote - Cramer on JCP - Stock Picks), which reports Thursday, could pop, he said.
Sears (SHLD Quote - Cramer on SHLD - Stock Picks), which Cramer owns Action Alerts PLUS, and is the "worst-in-show," could also go higher.
Moreover,
Apple (AAPL Quote - Cramer on AAPL - Stock Picks),
Research In Motion (RIMM Quote - Cramer on RIMM - Stock Picks) and
Google (GOOG Quote - Cramer on GOOG - Stock Picks) are all good, Cramer added.
Concerning the financials, Goldman Sachs "is going much, much higher," he said. But people should consider selling the brokerages and banks that haven't been working into the lift tomorrow.
"If you think the rally is fake, stay defensive," Cramer said. Either way, the market is still volatile, so be cautious.
Biotech Back in Vogue
During the 1990 market meltdown, high-growth biotechs worked, especially
Amgen (AMGN Quote - Cramer on AMGN - Stock Picks), Cramer told viewers.
Now, after this five-day rally, these same stocks should come back in vogue and three biotech stocks stand out, he said.
The "more conservative" pair he likes is
Genentech (DNA Quote - Cramer on DNA - Stock Picks) and
Celgene (CELG Quote - Cramer on CELG - Stock Picks). "When the rally ends next week these should be the men standing," he said, noting investors should scale into these stocks, which he likes for 2008.
Celgene and Genentech both have drugs that seem to have promising advances in the pipeline, he said. Celgene's Revlimid drug, which treats blood cancer, holds promise for increased label expansion next year, he said.
Celgene, Cramer said, is a stock investors should consider buying before the American Society of Hematology's annual meeting in December. He said the stock should go higher because it has a 42% long-term growth rate although its last quarter wasn't so hot.
Genentech, he continued, has several successful drugs, including its "miracle cancer drug" Avastin that could be approved for other uses. The catalyst here is a meeting the
Food and Drug Administration's Oncologic Drugs Advisory Committee will have on Dec. 5 to discuss Avastin. The meeting, Cramer believes, should bring great news.
Of the two, he prefers Celgene with Genentech a close runner-up.
Turn On Onyx
Cramer's favorite biotech and the one he feels is the Amgen of 2008 is
Onyx Pharmaceuticals (ONXX Quote - Cramer on ONXX - Stock Picks), a stock which hit its 52-week high on Nov. 7.
Its main drug, Nexavar, is used as an anticancer therapy and is "amazing," he said. Similar to Revlimid and Avastin, Nexavar is seeing label expansion and being used off-label to treat liver cancer. This, Cramer said, was a big part of why Onyx's last quarter was so "phenomenal."
While Onyx has the growth, it is riskier than Celgene or Genentech, which are bigger, more established and more profitable, he warned. Cramer recommended Celgene and Genentech for the more cautious.
Sudden Death
During the "Sudden Death" round, Cramer was bullish on
Marvel Entertainment (MVL Quote - Cramer on MVL - Stock Picks),
Marshall & Ilsley (MI Quote - Cramer on MI - Stock Picks) and
First Solar (FSLR Quote - Cramer on FSLR - Stock Picks).
He was bearish on
Panera Bread (PNRA Quote - Cramer on PNRA - Stock Picks) and
Yingli Green Energy (YGE Quote - Cramer on YGE - Stock Picks).
Mad Mail
In his "Mad Mail" segment, Cramer told an emailer he's increasingly concerned about
PepsiCo (PEP Quote - Cramer on PEP - Stock Picks) because of the higher cost of raw materials.
Coca-Cola (KO Quote - Cramer on KO - Stock Picks) came out and said their raw costs have peaked, meanwhile Pepsi wasn't able to say that, he said. Regardless, Cramer said he still considers Pepsi a good company.
Lightning Round
Cramer was bullish on
NYSE (NYX Quote - Cramer on NYX - Stock Picks),
Brocade Communications (BRCD Quote - Cramer on BRCD - Stock Picks),
AT&T (T Quote - Cramer on T - Stock Picks),
Verizon (VZ Quote - Cramer on VZ - Stock Picks),
ValueClick (VCLK Quote - Cramer on VCLK - Stock Picks),
Ultra Petroleum (UPL Quote - Cramer on UPL - Stock Picks),
Apache (APA Quote - Cramer on APA - Stock Picks),
XTO Energy (XTO Quote - Cramer on XTO - Stock Picks),
Google (GOOG Quote - Cramer on GOOG - Stock Picks),
Dolby Laboratories (DLB Quote - Cramer on DLB - Stock Picks),
Integrys Energy (TEG Quote - Cramer on TEG - Stock Picks),
Consolidated Edison (ED Quote - Cramer on ED - Stock Picks) and
Exelon (EXC Quote - Cramer on EXC - Stock Picks).
Cramer was bearish on
Nasdaq Stock Market (NDAQ Quote - Cramer on NDAQ - Stock Picks) and
NeuStar (NSR Quote - Cramer on NSR - Stock Picks).
Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by
clicking here.
For more of Cramer's insights during the Lightning Round, click here.