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has "massive losses and barely any revenues," Jim Cramer told viewers of his "Mad Money" TV show on Friday to look into buying this stock in a week or two.
"For most investors, speculation is a dirty word. But for me, it's the way to play the game," Cramer said.
Although Senomyx has almost no revenue whatsoever, he believes it's a great idea to buy this stock. Cramer advised people to put it into their "Mad Money" speculative portfolio. However, he reminded viewers that speculative stocks should take up no more than 20% of their portfolios.
Don't buy Senomyx -- a relatively unknown and small biotech company -- just yet, Cramer said. "Wait a week or two to buy it, and don't buy it after hours." Use small limit orders to buy it over time, he said.
Senomyx is the company for the current era, where people eat too many sweet and salty foods, but don't want to become obese or overweight, Cramer said.
This biotech company solves this problem by adding a chemical to foods and tricking people's taste buds. The amount of this chemical added is so small that Senomyx doesn't need to get FDA approval, Cramer said.
Senomyx has deals with
Also, "despite its losses, it has a strong balance sheet with $78 million in cash to keep it afloat," Cramer said.
Usually government works of, by and for the corporation, but when it comes to the food companies, it's not so, he said. It is possible that Senomyx can finally be the way for the government to get off of food companies' backs.
Even though Senomyx can only take up to 4% of royalties on its products, this should increase over time, Cramer added.
Making It With Merck
Back in 1986 when Cramer worked at
, which he owns for his charitable trust
Action Alerts PLUS, he had a young heart doctor who was his client. The client told Cramer about statins, pharmaceuticals that lower cholesterol levels in people at risk of cardiovascular disease.
The doctor was, at the time, testing this statin drug and told Cramer that statin could be a "miracle drug," which could, in turn, mean millions of dollars for
, the company sponsoring the work.
This got Cramer thinking, and he went to see the drug analyst who then worked at Goldman to find out more. But the analyst thought statin was all hype, laughed at Cramer and said that Cramer had no idea what he was talking about.
"This analyst thought that Merck was wrong to invest in," Cramer said.
However, back then, Cramer himself was also "a cocky young man," Cramer said, and so rather than being discouraged, he bought Merck hand over fist for his clients.
It turns out that Cramer's client, the young doctor, was right, and the analyst was "dead wrong." From this, Cramer made his clients fortunes and was able to start his own hedge fund.
Cramer tells this story because "there is a drug out right now, and its potential is being underestimated by the market."
The drug is avastin, and the company that makes it is
, he said.
"Avastin could have a profound effect on cancer treatments, as it starves the tumor," Cramer said. And although the market has great expectations for avastin, in his opinion, they are still too low.
Therefore, he recommended that people buy half their position in Genentech before it reports next week and buy the rest after.
Exactly one year ago, Cramer said he recommended
, which is now being bought by
In the long term, these two stocks could have made market players money, he said. But for the short-term players, he proposed the following game plan for next week:
First, one stock Cramer did not recommend is
Dell, he said, "needs a makeover" and more local call centers.
On the other hand,
, a great play on the secular growth trend toward Indian call centers, is a buy, Cramer said.
This is a stock that goes up on bad news, he said, adding that although it may be pricey, it's best of breed.
"Buy it before it reports next week," Cramer said.
Out of the biotechs, he said
was his favorite stock, and he advised buying it before it reports earnings on Wednesday.
Cramer was hesitant to recommend
, which reports next week as well, because it has a new CEO.
, which also reports next week, he said. In addition, he advised his viewers to take a chance and buy newspaper stock
before it reports next week.
Gannett has "actual revenue growth," Cramer said. "It has a great risk/reward."
should be bought if it buys YouTube, he said. "It will go to $500 this year if that happens." Google closed at $420.50 on Friday.
In the "Mad Mail," segment, when a viewer asked about
Alaska Communications Systems'
negative P/E, Cramer explained that he recommended buying this stock on a recent "Mad Money" show because although "the company may have been losing money, it's not anymore."
Cramer was bullish on
Cramer was bearish on
Smith & Wesson
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At the time of publication, Cramer was long Goldman Sachs.
Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."
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