Electronic Health Care Record Boom
In the "Executive Decision" segment, Cramer spoke with Glen Tullman, CEO of Allscripts-Misys Healthcare (MDRX), a stock Cramer has remained bullish on, despite health care reforms in Washington.
Tullman declared 2010 to be the "year of the electronic health record," saying that this will be the year a large percentage of doctors and health care providers finally adopt the technology. He noted that sales are up 30% year over year, and most of the federal stimulus package has not hit the sector yet.
Tullman explained that Allscripts has $40 billion to help their clients migrate to electronic records, which can cost as much as $44,000 per physician. Yet despite the costs, Tullman said Allscripts is making it easy for doctors by making their software easier to install, guaranteeing it meets all federal guidelines, and offering flexible payment terms.Tullman also noted that his company has great partners, with hospitals and larger providers referring their affiliated doctors to the company. He said the company's true promise of connecting disparate systems so that patients can avoid filling out forms with the same information over and over again will come to fruition as momentum grows. Cramer said the Allscripts story remains "a good one," and said that with the stock down in recent days, he'd pull the trigger.
Under the HoodCramer went under the hood of the auto industry to find the best auto part stocks for investors' portfolios. He said this sector's time has finally come, as the auto sector has come roaring back to life thanks to turnarounds at Ford (F) and others. But Cramer said there's more to the sector that increasing auto sales. He said that many money mangers are underweight the sector, meaning that if they want their funds to beat the S&P 500 this year, they need to load up big on the group, and soon. Given these two bullish trends, Cramer recommended Johnson Controls (JCI), as the "best of breed" in the sector. He said this company is the cheapest, most consistent earner in the group, which is why he owns the stock for his charitable trust, Action Alerts PLUS. Johnson Controls makes seating and interiors, batteries and HVAC systems for cars, and while only 42% of the company's revenues comes from autos, Cramer said the company has serious technology and manufacturing expertise that cannot be ignored. He said the company also has a great balance sheet. During the downturn, Johnson Controls left many of its unprofitable businesses, and with auto manufacturers trending toward dealing with fewer suppliers, the company is one of only a few great companies left standing. Johnson Controls trades at only 14 times its 2011 earnings, which makes it cheap, he noted. The stock may be only a point off its 52-week high, he noted, but it was a lot high before then.
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