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Annie Get Your X-Ray
"When stocks start trading without any attention, any support from analysts, people stop caring," Jim Cramer told viewers of his "Mad Money" TV show Monday, calling those stocks "orphans." Cramer, as the "Daddy Warbucks" of orphaned stocks, said that he's found an orphan that can make you mad money, and that's NightHawk Radiology ( NHWK). Hospitals need work done overnight but are too cheap to keep a full staff of every type of expert on the premises 24-7, he said, a point that he believes is especially true when it comes to paying radiologists. It takes a radiologist 15 minutes to look over an X-ray, and they're paid a lot of money to do so, he said. And in order to get X-rays looked at 24 hours a day without paying overtime, Cramer said hospitals will use NightHawk. The company uses doctors based in Australia and Switzerland who work while American doctors sleep, doctors who receive X-rays over the Web and send the results back to hospitals in the U.S., he said. Most of its business is in looking at CT scans, Cramer said, adding that this is not just a "quirky little midnight outsourcing play." According to Cramer, NightHawk currently services 13% of U.S. hospitals, and the Idaho-based company says the U.S. is not making full use of its services yet. He also believes that demand for the product is outpacing supply, with the number of practicing radiologists in the U.S. increasing by only 1.5% a year. And if the market is nowhere near saturation, he believes that the company's accelerated revenue growth is likely to continue. A caller pointed out that the company reports earnings on March 9, and wanted to know if it's a good idea to buy after the results. Cramer said that investors typically fear that a company will miss revenue estimates put out by Wall Street analysts. But NightHawk has no analyst coverage, so there are no earnings estimates to miss.