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NEW YORK (
) -- "Stop, look and listen," were Jim Cramer's words to the viewers of his
TV show Friday, as he outlined his game plan for next week's trading.
He said with so many traders selling first, and asking questions later, next week remains a "no trade zone."
Among the stocks Cramer will be paying attention to is
, a stock which he owns for his charitable trust,
Action Alerts PLUS. Cramer said he wants to hear whether the company can exceed the estimates, or whether earnings will be tempered by an inability to make enough products. He reiterated his $325 price target on Apple, saying the estimates for the company are still too low.
Also in the tech space, Cramer said he'll be watching cloud computing players
, as well as bellwether
for a read on the broader tech market.
Also on Cramer's radar, the banks stocks, including
Bank of America
, another Action Alerts PLUS name, and
. Cramer said the mortgage panic is overdone and doesn't take into account these banks' improving fundamentals.
Finally, Cramer said he'll be watching several companies for a read on the global recovery, including
( BUCY) and
, along with Action Alerts PLUS stocks
With so many stocks reporting, Cramer said he'll barely have time for
Chipotle Mexican Grill
, but will be watching those companies as well.
For "Speculation Friday," Cramer recommended
( ISPH), the last in his series of biotech companies with blockbuster drug potential.
Cramer said investors have two ways to win with Inspire. First, he said the company is a likely takeover target by
. Inspire is already in a close partnership with Allergan for two drugs to treat dry eyes and pink eye. Cramer said it makes sense for Allergan, a much larger company, just to buy all of Inspire, rather than continue licensing it's products.
Even more attractive however is Inspire's pulmonary business and its treatment for cystic fibrosis, which is currently in phase III testing. Cramer said Inspire's treatment is unlike any other, and just received orphan status from the government, meaning it will have no competition. Cramer said the drug, due for approval in the second half of 2011, could be a $300 million to $500 million opportunity.
Cramer said with $106 million in cash on the books, Inspire is not going belly up anytime soon. Cramer said he'd be a buyer of Inspire with so many lucrative prospects.
Going With Teva
Continuing his biotech theme, Cramer honed in on muscular sclerosis, a disease affecting 350,000 people in the U.S., and the companies working towards a cure.
Cramer said MS drugs currently weigh in at $10 billion annually, with estimates upwards of $15 billion over the next 10 years. Cramer said while
remains a favorite in this space, he'd be a seller of the company, as increased competition is on the horizon.
Cramer explained that new treatments are on the way, including ones that come in pill form, as opposed to an injection, and ones that offer fewer serious side effects. He said the extent to which these new drugs will affect Biogen's business have not been factored into the stock.
But Cramer said he is a fan of
, the world's largest generic drug maker, which also happens to have a great branded drug business, one quarter of which is dedicated to MS. Teva is also a stock which he also owns for his
Action Alerts PLUS portfolio.
Cramer said Teva is the smart, safe way to play MS, as Teva's MS drug will not be affected by new competition. He said the stock took a big hit back in July on patent expiration fears, but those fears were unfounded, as the company's patents remain in good shape through 2014.
Trading at just 10 times earnings, Cramer said Teva is a terrific risk reward, especially given its projected 14% growth rate and healthy drug pipeline.
In the "Executive Decision" segment, Cramer spoke with Michael Mendes, chairman, president and CEO of
, a stock that's up 75% since Cramer recommended it on Dec. 5, 2008.
Mendes explained that his company's recent acquisition of the "Kettle" brand of potato chips has changed Diamond's earnings model and confused some analysts. He said while earnings will be skewed towards the back half of the year, Diamond raised its full-year guidance overall.
Mendes also said that Diamond grew its earnings 52% this past year, and is guiding towards 25% to 30% earnings per share growth next year. He said the company has great brands to drive Diamond forward for many years.
One area of opportunity for the company, according to Mendes, are mass merchandisers and club stores. He said Diamond is making progress in penetrating those channels, where brands must fight harder for limited shelf space.
Mendes also spoke highly of his company's new, all natural tortilla products, marketed under the "Tias" brand. He said Diamond plans to deliver a multi-brand promotion around the Super Bowl to introduce its many exciting new snacks.
Cramer was bullish on
Compass Diversified Holdings
Enterprise Products Partners
He was bearish on
United States Natural Gas
--Written by Scott Rutt in Washington, D.C.
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At the time of publication, Cramer was long Apple, Bank of America, Boeing, Honeywell, Teva Pharmaceuticals.
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