'Mad Money' Mailbag: Stock Battles
Editor's Note: The following are questions received from viewers of "Mad Money," seen every day at 6 p.m. EDT on CNBC.
May Department Stores(MAY Quote) is trading around its 52-week high. Should I sell now, or wait for the Federated Department Stores(FD Quote) buyout offer to close? -- Terry from Cincinnati, Ohio James J. Cramer: Federated's offer consists of about 40% cash and 60% stock, so I do not believe there is much upside potential in May shares. With that in mind, I'd ring the register, selling shares here.
I did some homework after you recommended Amylin Pharma(AMLN Quote), and purchased the stock. After rising, the shares sold off on an analyst downgrade. Is this still a good biotech stock? -- Karl from Michigan James J. Cramer: I remain bullish on Amylin's prospects, and view this pullback as a buying opportunity. The downgrade you mentioned was based primarily on valuation, and I believe the company's diabetes product will continue to see rising sales.
Is it too late to buy Electronics Boutique(ELBO Quote), or is GameStop(GME Quote) the better play? -- Dave from California James J. Cramer: First, let me say that I own GameStop for my charitable trust, ActionAlertsPLUS. I believe it is the better way to play the merger of these two video-game retail giants, which will have a larger combined market share than Wal-Mart(WMT Quote). Despite recent earnings disappointments from the video-game makers themselves, the launch of two new platform upgrades in the coming quarters should drive a new sales boom across the entire industry.
What do you think about Walgreen(WAG Quote)? -- Lance from Texas James J. Cramer: This is my favorite way to play the drug retail business, and one of the best retailers in any area. Walgreen has the best margins in the industry, and should be considered a core long-term holding.
Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by clicking here. Learn how to become a better investor. Get started now with the investing rules that Cramer lays out:
| 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 | ||||
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