This column was originally published on RealMoney on June 7 at 12:36 p.m. EDT. It's being republished as a bonus for TheStreet.com readers.
Suddenly there are so many reasons to own the drug stocks that you know we don't have a one-day move on our hands. As the Pharmaceutical Index (DRG) flies, we know that the companies bidding for
over-the-counter products have a pulse and the ones that said no aren't going to have to spend a lot of money. Hence, the run in
Johnson & Johnson
. Obviously, the sheer notion that something is worth something to someone in drugs is moving Pfizer.
I know from the multi-day moves in
-- the latter is actually up, ex-dividend -- that the drug move could take these stocks higher, as well.
I think that J&J and Schering have a lot going for them, the J&J plus being that it is back in action and can do a lot with Pfizer's properties, given its incredible breadth of Band-Aid/Q-tips products, and Schering did just report a monster upside surprise that no one cared about.
I know that a recent decision in a court case in Philadelphia putting the Food and Drug Administration on the hook when a drug goes bad, rather than the company, is also in the mix -- this time for a use of Paxil. Legal liability has been killing the drugs group. Another good sign.
If I were at my hedge fund, I would be buying the DRG furiously. Don't want to pick up the one that goes bad, as I almost did with
a few days ago before a vicious Merrill Lynch downgrade right on the heels of positive comments.
It makes that much sense. These companies have more momentum than the food stocks but have underperformed even the lackluster
They are right. Take a look at the large takes. They determine things. Someone this very morning took a million shares of Schering at $19.70, up big from Tuesday's close. The way things have worked with these big takes is they are the first of many. I may be talking my book, but that stock has new high written all over it, and that's at $22!
At the time of publication, Cramer was long Schering-Plough.
Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for
Action Alerts PLUS. Listen to Cramer's RealMoney Radio show on your computer; just click
here. Watch Cramer on "Mad Money" at 6 p.m. ET weeknights on CNBC. Click
here to order Cramer's latest book, "Real Money: Sane Investing in an Insane World," click
here to get his second book, "You Got Screwed!" and click
here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by
TheStreet.com has a revenue-sharing relationship with Traders' Library under which it receives a portion of the revenue from Traders' Library purchases by customers directed there from TheStreet.com.