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Spinal Tap

Medical device makers' stocks should be rocking in this market, Jim Cramer said Wednesday on his "Mad Money" TV show. But, because a number have received Department of Justice subpoenas, Kyphon is the only one that has pricing power, said Cramer.

The DOJ is investigating medical device companies for possible violation of federal anti-kickback rules. Those having received subpoenas include Zimmer Holdings ( ZMH), Stryker ( SYK - Get Report), Biomet , Guidant , Medtronic ( MDT - Get Report) and St. Jude Medical ( STJ), said Cramer. That means those companies won't dare raise prices while the investigation is ongoing, he said.

Although it's stock has done well, St. Jude's, said Cramer, is only up for ancillary reasons. Cramer would ring the register. Another stock in the group, Boston Scientific ( BSX), is facing a class-action suit; Cramer wouldn't touch it.

That leaves only Kyphon, a maker of medical devices for spinal ailments, said Cramer. Kyphon hasn't received a subpoena, and that means it has legitimate pricing power, he said.

South America Goes North

President Bush is set to visit Brazil and Argentina in the next four days, and Cramer envisions increased positive media coverage of the Brazilian and Argentinian economies. That should create a rally in Latin American stocks traded there, he said.

Cramer's shopping list of trades for Argentina includes:

  • Petrobras Energia Participaciones ( PZE), an oil company;

  • Telecom Argentina ( TEO - Get Report), a telecommunications company that Cramer believes will benefit from media coverage of wireless and Internet growth; and

  • Grupo Financiero Galicia ( GGAL - Get Report), a bank that should benefit from positive coverage of Argentina's economy.

    Cramer's shopping list for Brazil includes:

  • Gol Linhas Aereas Inteligentes ( GOL), a profitable, growing airline that can pass higher fuel costs on to customers and that also isn't saddled with U.S.-style labor unions, said Cramer;

  • Companhia Vale Do Rio Doce ( RIO), an iron ore and copper mining company;

  • Companhia Siderurgica Nacional ( SID), a steel company, as steel demand is strong in developing Latin American countries, said Cramer;

  • Gerdau ( GGB), another steel company;

  • Tele Norte Leste Participacoes , a telecommunications play;

  • Petroleo Brasileiro ( PBR - Get Report), an oil stock, and

  • Banco Bradesco , a financial play.

    The two stocks Cramer would recommend as investments and not just trades are Petroleo Brasileiro and Banco Bradesco, he said.

    In response to a question on coal and copper stocks, Cramer said he was wrong on Fording Canadian Coal Trust ( FDG), but he still likes Peabody Coal ( BTU - Get Report).

    On copper, he said Phelps Dodge is not as good as Southern Copper .

    " Fed-proof" your portfolio, said Cramer, with stocks that make money, no matter if interest rates are rising and the economy is slowing, he said. One stock that fits the bill is DaVita ( DVA - Get Report), an operator of dialysis centers.

    DaVita should benefit long term from an aging population, said Cramer. The company already has strong "same store" sales, and it has pricing power after acquiring some of its competition. DaVita is also seeing growth from a healthy clinical research business, he said.


    Charles Pizzi, CEO of Tasty Baking , joined Cramer by telephone to talk about his company's expansion. (To watch Cramer's interview with Pizzi, please click here.)

    Pizzi said Tasty Baking was a turnaround story. The company has a solid foundation upon which to grow, he said. Tasty has always had a great brand, and now it also has the management expertise, marketing, product innovation, technology platform and improved capital structure that will allow it to expand.

    "Is this just going to be a regional brand for the rest of our lives?" asked Cramer.

    "That's a good question," said Pizzi, who noted his company has been expanding one market at a time throughout the upper Midwest and the Northeast.

    "Do you have enough money to support these brands?" asked Cramer.

    "We're doing this on a methodical basis ... with our partners," said Pizzi.

    Cramer summed up the interview saying he loves Tasty's products, "but I need to see two quarters of growth because of the 20 years of flat line. ... But, let's keep an eye on this."

    Lightning Round


    Cramer was bullish on Google ( GOOG - Get Report), Apple Computer ( AAPL - Get Report), Wachovia Bank ( WB), Advanced Micro Devices ( AMD - Get Report), Conexant Systems , Hansen Natural ( HANS), L-3 Communications ( LLL), Microsoft ( MSFT - Get Report), Marriott ( MAR), Hilton Hotels ( HLT), UnitedHealth Group , Schering-Plough ( SGP), Dow Chemical ( DOW), GlaxoSmithKline ( GSK - Get Report), Kinder Morgan ( KMI), Nabors Industries ( NBR), Georgia Gulf ( GGC), International Business Machines and XTO Energy .


    Cramer was bearish on Shanda Interactive Entertainment ( SNDA), TJX ( TJX), Northern Trust , Waste Management ( WMI), Level 3 Communications ( LVLT), Intergraph ( INGR), PacifiCare Health Systems Time Warner ( TWX), Eastman Kodak and Symbol Technologies ( SBL).

    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

    At the time of publication, Cramer was long Microsoft and UnitedHealth Group.

    James J. Cramer is a director and co-founder of He contributes daily market commentary for's sites and serves as an adviser to the company's CEO. Outside contributing columnists for and, 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 ActionAlertsPLUS. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here. 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."