Jim Cramer's Stop Trading!: Buying Biotech

He says move in when others are rotating out.
Author:
Publish date:

The market is rotating out of biotech, which makes stocks in the sector buys, Jim Cramer said on

CNBC's

"Stop Trading!" segment Thursday.

"The market wants out of these names so badly it's almost like they're creators of problems rather than solvers," Cramer said. "The big money is made by buying the ones they're leaving and selling they ones they're buying."

Cramer named

Genzyme

(GENZ)

,

Gilead

(GILD) - Get Report

,

Genentech

(DNA)

,

Amgen

(AMGN) - Get Report

and

Celgene

(CELG) - Get Report

.

Cramer said defense contractors like

General Dynamics

(GD) - Get Report

and

Northrop

(NOC) - Get Report

are in a "secular bull market." Part of the reason is optimistic comments from

Parker-Hannifin

(PH) - Get Report

about commercial and military aerospace.

Yahoo!

(YHOO)

and

Google

(GOOG) - Get Report

are "places where people think growth is going to be unbelievably good," Cramer said, and with the latter likely to produce annual revenue of $9 a share in coming years, the stock will see more upside if its earnings multiple of 60 is preserved.

Cramer also praised

Brocade

(BRCD)

, which he called the "next big stock to take off." The stock is trading above $6, but came up from $3 and traded for above $162 in November 2000, Cramer noted.

On retailers, Cramer said the fact that

Gap

(GPS) - Get Report

is down only moderately while

J.C. Penney

(JCP) - Get Report

and

Kohl's

(KSS) - Get Report

are in the green shows that "the market isn't as stupid as we think it is."

At the time of publication, Cramer owned Yahoo! in a charitable trust.

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

clicking here.

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.