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TheStreet Open House

Cramer's 'Mad Money' Recap: Next Week's Game Plan

Watson said Sandstorm has just a $1 billion market cap, compared to the $10 billion valuation of Franco-Nevada (FNV) and $14 billion for Silver Wheaton (SLW). That means that many smaller deals are ignored by the bigger guys, leaving plenty of room for Sandstorm to grow.

When asked how the company makes money, Watson explained that in return for financing, Sandstorm gets to purchase gold at just $400 an ounce and has additional contracts that ensure the company doesn't lose money no matter how low the price of gold may go. Given Sandstorm's strong cash flow, Watson said his company will become a dividend payer once its current stage of growth is complete.

Finally, when asked how high the price of gold could go, Watson said he easily sees $2,000 an ounce as a possibility in the near future. Cramer said like Franco-Nevada, Sandstorm remains a terrific investment in a choppy market.

Speculation Friday

For "Speculation Friday," Cramer returned to one of his favorite themes: orphan drugs.

He said when it comes to betting on biotech, nothing is more lucrative than an orphan drug that receives government protections and can charge big premiums for the patients they serve. That's why he once again recommended Vertex Pharmaceuticals (VRTX), a stock that's seen a 73% gain since Cramer recommended it two years ago.

Cramer said Vertex' new drug, VX-809, is currently in phase II testing to treat cystic fibrosis. The company published bullish data back in May, news that sent the stock up $20 in a single day. But about a month afterwards, Vertex was forced to admit it misinterpreted some of its data, news that slowed its progress and cooled its share price.

Vertex is set to announce the final phase II data Thursday, and Cramer said he expects the former troubles will finally be put to rest. Given VX-809 could fetch as much as $200,000 per year per patient, Cramer said peak sales could be $6 billion for Vertex. Given similar valuations, the company's stock could be worth double or more.

Cramer advised getting into Vertex ahead of Thursday's conference. Investors wishing to do more homework don't have to hurry, though, as VX-809 won't hit the market for at least a year.

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