Plenty of Reasons to Feel Better About Drugs

With this much going right for these stocks, you know we don't have a one-day move on our hands.
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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

Pfizer's

(PFE) - Get Report

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

(JNJ) - Get Report

and

GlaxoSmithKline

(GSK) - Get Report

and

Schering-Plough

(SGP)

. Obviously, the sheer notion that something is worth something to someone in drugs is moving Pfizer.

I know from the multi-day moves in

General Mills

(GIS) - Get Report

,

Kellogg

(K) - Get Report

and

Altria

(MO) - Get Report

-- 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

Wyeth

(WYE)

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

Campbell

(CPB) - Get Report

-

Hershey

(HSY) - Get Report

cohort.

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.

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