"Don't be fooled thinking you missed the boat" on Celgene ( CELG) "when it's still in port waiting for you," said Jim Cramer on his "Mad Money" TV show Tuesday. Celgene rose 10% Monday when word leaked that its Revlimid drug for myelodysplastic syndromes (MDS) does not have the safety concerns people feared. Celgene goes before a Food and Drug Administration panel Wednesday to seek approval for Revlimid.
Banking on BiotechCramer said that analysts are beginning to downgrade the stock ahead of the panel meeting, believing that all the good news is priced in. "That logic is wrong," said Cramer, adding that biotech stocks often run in anticipation of FDA approval, but they can run after approval is granted as well. Cramer said he would buy Celgene ahead of the FDA panel meeting -- and afterward -- if more analyst downgrades were forthcoming. A caller asked how one should go about doing "homework" on biotech stocks. "It's not easy," said Cramer. If one doesn't have the time or inclination, Cramer recommends owning a biotech exchange-traded fund or the ( FBIOX) Fidelity Select Biotechnology fund. Another caller asked Cramer what he thought of Celgene's prospects for the long term. Cramer said long term he preferred Amgen ( AMGN) and Genentech ( DNA). Celgene is an intermediate-term play, he said. Another caller asked how much revenue Revlimid would generate for Celgene. Cramer said he expected $250 million in sales the first year and "maybe more later," as the drug's use expands to other indications.
Lumberjacking"It looks like we're headed for a lumber shortage," said Cramer. "We need all the lumber we can get our hands on in order to rebuild," in the wake of Hurricane Katrina. The lumber business has been "awful" for a very long time, said Cramer. So, it's important to be selective. Cramer was bullish on Plum Creek Timber ( PCL), Georgia-Pacific ( GP) and Weyerhaeuser ( WY).
Fit to Print and Buy?MarketWatch.com senior columnist Herb Greenberg joined Cramer to talk about newspaper stocks. Greenberg has written favorably about those stocks, and Cramer is decidedly bearish. Greenberg said his best source on newspaper stocks, mutual fund manager Bob Olstein (who owns Tribune ( TRB) and Knight-Ridder ( KRI)), believes that Cramer is wrong to be bearish on newspaper stocks. Greenberg pointed to the companies' "phenomenal" cash flow and said he believes that there will be industry consolidation lest "some of these go down the tubes." He said that newspapers are still " the big mass media" in local markets, adding that it's "something advertisers are still paying for." Cramer remained unconvinced, however, arguing that younger generations are not reading newspapers but instead are getting their news from the Internet.
BullishCramer was bullish on Best Buy ( BBY), Prudential Financial ( PRU), MetLife ( MET), First Marblehead ( FMD), XM Satellite Radio ( XMSR), Sirius Satellite Radio ( SIRI), IntraLase ( ILSE), Aramark ( RMK), Alliant Techsystems ( ATK), Ameritrade ( AMTD), Charles Schwab ( SCH), Distributed Energy Systems ( DESC), Capstone Turbine ( CPST), Research In Motion ( RIMM), TXU ( TXU) and Schlumberger ( SLB).
BearishCramer was bearish on EarthLink ( ELNK), Novell ( NOVL), Hudson City Bancorp ( HCBK), Sigma Designs ( SIGM), RadioShack ( RSH), Medarex ( MEDX), Restoration Hardware ( RSTO), Red Hat ( RHAT), Palm ( PALM), Orbital Sciences ( ORB), Seagate Technology ( STX), Nektar Therapeutics ( NKTR) and Pfizer ( PFE). *For all you home-gamers, a 'mon-back opportunity means Cramer would back up the figurative truck and load up on a stock.
|1.||Pigs Get Slaughtered||2.||It's OK to Pay the Taxes|
|3.||Don't Buy All at Once||4.||Buy Damaged Stocks|
|5.||Diversify to Control Risk||6.||Do Your Homework|
|7.||Don't Panic||8.||Buy Best-of-Breed|
|9.||Defend Some Stocks||10.||Don't Bet on Bad Stocks|
|11.||Own Fewer Names||12.||Cash Is for Winners|
|13.||No Regrets||14.||Expect Corrections|
|15.||Know Bonds||16.||Don't Subsidize Losers|
|17.||No Room for Hope||18.||Be Flexible|
|19.||Quit When Execs Do||20.||Patience Is a Virtue|
|21.||Be a TV Critic||22.||When to Wait 30 Days|
|23.||Beware the Hype||24.||Explain Your Picks|
|25.||Find the Bull Market|