After the elections, people thought enemy No. 1 would be the oil stocks, but instead, drug stocks have become the target, Jim Cramer said on his
"RealMoney" radio show Friday.
Even though Cramer said he worries about higher taxes on the oils, it's the drug stocks that people are panicking about and bailing out of right now. They have become
public enemy, even though they save people's lives -- unlike oils -- he said.
However, Cramer believes that the worst should be over for the drug stocks by Wednesday next week.
"The oils could soon get the wrath of Congress and might be the next target," he said. "We are in a position right now where the oil stocks are vulnerable, since they are up so much, and drug stocks are not vulnerable, as they are so low here."
It is time to sell into the strength of oil plays and buy drug stocks, Cramer said.
is really good at one thing -- issuing press releases," Cramer told listeners.
First, the discount retailer did a "price rollback on prescriptions," but those price cuts were not really beneficial for consumers because they were for very few drugs and not steep enough to matter, he said.
Then Wal-Mart cut prices for its big-screen TVs. But the deals were mostly online, and the in-store discounts offered were not only not that good, but also Wal-Mart hardly had any inventory in-store, Cramer said.
On Friday the retailer is cutting prices of its appliances, but
, which Cramer owns for his charitable trust,
Action Alerts PLUS, are not getting hit, he said.
This is because people are realizing that this is a company that simply "issues futile press releases in a futile attempt to get people into its stores," Cramer said.
"Don't sell other retailers because of what Wal-Mart says," he advised
, on the other hand, is a company which is going to have accelerated revenue growth, Cramer said. "This means the earnings will follow."
Not only has the company come out with a number of initiatives, such as Sephora and the "red box" initiative, but it also has a model like no other, which targets to low-range, midrange and high-range customers.
J.C. Penney is a "very inexpensive stock even after the run it has had," he said. "An undervalued stock is always going to be out there moving up until people recognize it."
The stock is at $80 and is going to $90, Cramer predicted.
"Given the power shift in Congress, there have been some downright screwy opinions floating out there that involve the Democrats and drug companies," Cramer said.
Contrary to people's belief, pharma is not overinflated, Cramer said.
as an example, he said it has a good 3.5% yield, yet is down almost 10% from where it was in 2001.
"It doesn't make sense that it's down that much," Cramer said. These stocks are "way, way down, even though they are not losing money."
Also, although people are concerned about price controls, these companies are not going to be able to get price controls under President Bush, he said.
"This whole selloff in drugs, a week from now is going to look foolhardy," Cramer said, advising people to wait for price levels in drug stocks to go down and buy more incrementally.
Although some market players believe that low-priced stocks are cheap and could make them rich, they need to realize that no matter the case, low-priced stocks could go to $0 and lose people all their money, he said.
is a $2 stock that people have been buying because they can't resist, Cramer said. It's tempting to think this $2 could make them money because of its recent deal with
However, Conexant has a "bad balance sheet," he said. "It can't advance much more than it has because it has to find a way to pay back all the debt it has accumulated."
If people like the business Motorola is giving to Conexant, Cramer suggested buying
It is a "high quality" company that reported a "great" quarter -- and it's in the same business, he said. "Forget the risk of Conexant."
Disney is a "terrific buy when it pulls back to $31," Cramer told a caller.
"It is a pullback that must be bought," he said.
The company's theme parks and TV are performing well, but as Disney is up significantly, Cramer advised people to wait for a pullback and then buy the stock.
Responding to his next caller,
is bottoming, Cramer said.
However, there are still six months to go before this stock starts making people money, he said. Cramer recommended staying away from the stock for now, but said it is definitely in the process of bottoming.
When a listener inquired about
, Cramer commented that the company's conference call was "somewhat glib," given the worries that so many market players had about the stock.
That is why he said he was "queasy" about recommending the stock; he believes there is something wrong with it.
Much of what Cramer told a caller about what he liked about
was its coming merger with
Although he believes that the deal will still close, it hasn't happened yet because of regulation.
"The upside is capped unless Congress sees the error of its ways and lets this deal go through," Cramer said.
Until the deal closes, which it will, he doesn't believe that people will see much upside.
Las Vegas Sands
is "a stock people want to own because they know that Macau is gigantic," Cramer told another caller.
However, because LVS has gone up too much, Cramer won't touch it right now.
When a caller asked about
Vornado Realty Trust
, Cramer called the company's CEO Steven Roth "one of greatest real estate investors of all time."
Vornado is "a multiyear story," he continued. "I would not sell it."
Cramer said he would buy 25 out of 100 shares now and wait for the stock to come in to buy the rest.
At the time of publication, Cramer was long Sears Holdings.
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
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