Cramer's 'Mad Money' Recap: The Next Great Diagnostics Play

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When Jim Cramer learned that Biosite (BSTE Quote) got a takeover bid from Beckman Coulter (BEC Quote), he immediately started thinking about which stock could follow in Biosite's footsteps, he told viewers of his "Mad Money" TV show Monday.

Now Biosite, a stock Cramer recommended to viewers on his Feb. 23 show, is in the past, and people must sell it, he said. Market-players should take their profits from Biosite and buy Cepheid (CPHD Quote) as "the next great diagnostics play," Cramer said.

Last weekend, there was an article in Barron's that said the Veterans Administration is mulling who should get the big contract for staph-infection tests in hospitals, and Cramer believes tiny Cepheid could get the contract over Becton Dickinson (BDX Quote).

And even if Becton Dickinson does get it, that company is too big, and winning the contract won't have as positive an effect on the stock as it would on Cepheid's, Cramer said. "If [Cepheid] gets the deal, it could soar," he said.

If Cepheid doesn't win the contract, it still should go up, Cramer said. He said the diagnostics business is "hot" and that even though the Democrats in Congress are anti-Big Pharma, they seem to like diagnostics companies.

Cepheid also could be a good takeover candidate for a company looking to expand its diagnostics division.