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"Sometimes even Cramer can make mistakes," Jim Cramer told viewers of his "Mad Money" TV show Thursday, referring this time to Pain Therapeutics ( PTIE).

He said that he shot the company down during the Lightning Round segment of a recent show because he thought it was too risky. But after revisiting the company he found that it's on the cutting edge of modern medicine.

Cramer said the company has plenty of cash and trades at a low price-to-earnings ratio. "They're barely valued above what they have in the bank," he said.

But just as importantly, he said, Pain Therapeutics is close to perfecting the "holy grail" of medical science: the painkiller. He said the company could be a winner if it successfully develops abuse-resistant opiates.

Everybody has pain and everyone wants to kill it, but not everyone wants to end up practically a heroin addict, he said, pointing out that the popular painkiller OxyContin is euphemistically called "hillbilly heroin" because it is highly addictive and sometimes abused.

The company has partnered with King Pharma to make abuse-resistant painkillers, and Cramer said such a product may not hook users, but it could hook doctors.

Since OxyContin was introduced in 1995 and generic versions were put on the market, the abuse of painkillers has skyrocketed, Cramer said.

Doctors don't want to prescribe OxyContin or its generics because their addictive properties are so similar to heroin and morphine, he added.

Stock for the Shelves

"Capitalism works because people like to own stuff," said Cramer, who was taking inspiration from a famous Frank Zappa quote, and they need a place to put all that stuff, Cramer added.

This led him to his second suggestion of the day, Public Storage ( PSA - Get Report), a real estate investment trust that owns and operates large storage facilities.

The company reported a great quarter, rents a total of 90 million square feet in 80 cities nationwide and saw 90.5% occupancy in the last quarter, Cramer said.

It's like renting apartments without the tenants or the plumbing, he added, which is why occupancy costs next to nothing for the company.

Public Storage offers a strong dividend and generates a lot of free cash, Cramer said, and the company says same-store and net operating income rose more than 9% in the quarter as rent went up about 5%.

But the key to this stock is that it's a stealth play on baby boomers, Cramer said, calling his generation one that loves stuff but refuses to part with it even if they move to smaller homes.

People are moving from big to little houses and apartments, he said, but they'd rather lock their stuff up in a public storage unit rather than sell it or give it away.

This is a real trend, Cramer said, and he believes that Public Storage's numbers support his thesis.

The company also has a bid for Shurgard Storage Centers but Cramer believes that Public Storage will grow organically even without the acquisition.

He told a caller that Ryder ( R - Get Report), the moving van company, could be a play on the storage trend.

Eye Spy

All the optical spy gear you see on TV shows really exists, Cramer said, and a lot of it's made by Essex ( KEYW), a company he called "top tier."

"It's unnoticed or misunderstood," he said, and that provides an opportunity to get in before the story hits Wall Street's radar.

Cramer said the company is basically a bunch of PhDs with high-level NSA clearance doing tons of spy work for our government, meaning that any competitors face a major barrier to entry because the National Security Administration doesn't just give that clearance to anyone.

As the domestic security business swells, the company is a small fish in a huge pond. But Cramer believes Essex has a lot of great proprietary technology that could be valuable to bigger players.

And the company has something more revolutionary than any of the analysts understand, he added, saying that Essex can encrypt data that travel over fiber optic networks. Just about anyone could tap into a fiber optic line and monitor communications until Essex came along, Cramer said.

And this technology is not limited to government use, since even companies like Goldman Sachs ( GS) send data via fiber optics, he said, noting that Essex is the company that can keep it all secure.

Mad Mail

Cramer also opened the "Mad Money" mailbag and fielded a question from a viewer who wanted to know if he should take advantage on New York Attorney General Eliot Spitzer's investigation into the radio industry and short Clear Channel Communications ( CCU - Get Report).

Cramer said that the viewer was barking up the wrong tree because Clear Channel is a bad stock on its own, and doesn't need Spitzer to knock it down.

He advised ringing the register on Rediff ( REDF), a move they should have considered the minute the stock went up so high so fast.

And he suggested taking a look at ABB ( ABB) as a play on nuclear energy.

However, he told a viewer that Take-Two Interactive ( TTWO) was the wrong way to play the video-game industry cycle and said that he would stay away from the stock.

Lightning Round

Cramer was bullish on: Broadcom ( BRCM), American International Group ( AIG), Electronic Arts , Albany International ( AIN), Dynegy ( DYN), Paccar ( PCAR), Cummins ( CMI), Oregon Steel , Maverick Tube , Hexcel ( HXL), Advanced Micro Devices ( AMD), Sirius ( SIRI), Statoil ( STO), Ultra Petroleum ( UPL), Navteq ( NVT), W.W. Grainger ( GWW)and Ameritrade ( AMTD).

Cramer was bearish on: eBay ( EBAY), Lucent , Crocs ( CROX), Activision ( ATVI), Time Warner ( TWX), American Axle & Manufacturing ( AXL), XM Satellite Radio , Juniper Networks ( JNPR), Oracle ( ORCL), Ashland ( ASH)and Sify ( SIFY).

For more of Cramer's insights during the Lightning Round, click here.


Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by clicking here.

At the time of publication, Cramer was long Ameritrade and Lucent.

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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