Right now the health care sector is out of favor, but investors should get into these stocks before they're back in favor and all run higher, Jim Cramer told viewers of his "Mad Money" TV show Thursday. In this space, he said, take a closer look at diabetes drugs, given the fact that the global diabetes market is worth $17.8 billion, up from $3.8 billion in 1995. One way to approach this market, said Cramer, is to take a look at two health management companies, Matria Healthcare ( MATR) and Healthways ( HWAY). While these companies are not pure plays on diabetes, he said that these companies monitor, follow up with and manage patients with diabetes, telling them what to do to keep their conditions from worsening. They ensure that diabetes patients and their doctors are doing things right, he said. And this saves patients and insurers money because "it's a lot cheaper to treat type II diabetes than it is to treat kidney failure." Even though Matria just gave
UnitedHealth Options HeatBefore welcoming Dr. William McGuire, chief executive at UnitedHealth Group ( UNH - Get Report) to the show, Cramer disclosed that he owns the stock for his
Am I Diversified: The New ChallengeCramer has said time and again that "diversification is the only free lunch." But he said that the game he plays, "Am I Diversified," has become too easy for viewers. So on Thursday, he not only judged portfolios for diversification, but for the quality of the stocks as well. The first caller, Steve, said that he owned ABB ( ABB), Starbucks ( SBUX), Cameco ( CCJ), Nokia ( NOK) and Tata Motors ( TTM). "Here I am trying to change the rules so it's more a contest of wills ... and here comes Steve with this one," he said. "Starbucks is two thumbs up ... I like Nokia, the No. 1 cell-phone maker. ... So far, we're doing pretty good." Cramer added that he likes Tata Motors, along with Honda ( HMC) and Toyota ( TM). But he spotted a pair with ABB, the largest maker of nuclear power plants, and Cameco, which makes the uranium for nuclear plants. While he blessed the quality of all the stocks, he said the caller would have to sell one of his nuclear plays and pick up a health care stock. The second caller owned Bank of America ( BAC), Natural Resource Partners ( NRP), Conexant ( CNXT), Costco ( COST) and Goldcorp ( GG). Cramer said that this diversified portfolio was full of high-quality stocks. He said that Conexant's stellar quarter would be overshadowed by weakness at Microsoft ( MSFT), but that the stock was good. He called Natural Resource Partners an interesting energy play, and added that Costco is pulling back because of gasoline prices. He is a longtime fan of Goldcorp, and called Bank of America "the largest, best bank I know of." Two different viewers emailed Cramer to find out where he finds out which companies are in a certain industry. After saying that he has used Google to find companies in a sector, he added that the S&P companies list is a useful tool, as well as Wall Street research.
Lightning RoundCramer was bullish on Weight Watchers ( WTW), Devon Energy ( DVN), Caterpillar ( CAT), Nokia ( NOK), Sealy ( ZZ)and Penn National Gaming ( PENN). Cramer was bearish on Sirius ( SIRI), NutriSystem ( NTRI), Xerox ( XRX), Novell , Suntech Power Holdings ( STP), Albany International ( AIN), Motorola , Bausch & Lomb and Pinnacle Entertainment ( PNK). For more of Cramer's insights during the most recent Lightning Round,
Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by clicking here.