Cramer's 'Mad Money' Recap: Nvidia on Spec

 

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"This, alas, is Speculation Friday, where we in Cramerica extol the dangers of risk and recklessness," Jim Cramer told viewers of his "Mad Money" TV show.

"It's vital that you hold some high-risk stocks as part of a diversified portfolio," he said, and he offered CV Therapeutics (CVTX) and Nvidia(NVDA) as examples.

Cramer added CVTX to his biotech speculative buy list, calling it a little $11 stock and a "battleground." It makes small molecule drugs for cardiovascular diseases, and as of May 10, 36% of the float had been sold short.

However, "the bear case doesn't hold up under any scrutiny," he assured people.

There are two ways market players can win here: Either the earnings explode, bringing CVTX's price to the mid-$20s, or it gets taken over, Cramer said.

First, he believes that CVTX is a "win" on its Ranexa drug, of which it owns 100% of the rights. Cramer said he feels sales for Ranexa could skyrocket.

And that's not the only thing driving earnings. CVTX's Regadenoson drug is in the last stage of its development and should be approved in 2008. If the drug does get approved, CVTX will get 20% of the royalties, Cramer said.

The combination of these two drugs should send stock higher.

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