Now that they're down, buy Merck (MRK) and Schering-Plough (SGP), Jim Cramer said on CNBC's "Stop Trading!" segment Friday.

"Just so you know, I just issued an alert. ... You should buy it here," he said of the cosponsors of Vytorin, which made headlines today after the Food and Drug Administration said it would issue early communication on the drug. He's reminded of Bausch and Lomb, Bristol-Myers Squibb ( BMY) and other pharmaceutical companies that experienced exaggerated stock-price dives on bad news. Those situations, Cramer said, represented buying opportunities.

"The headline risk in drugs is also far worse," Cramer said. "This is what happens with drug stocks. Everyone panics at the same time. They get knocked all the way down."

"This is just unbelievable to me," Cramer added, saying that to cut shares of Schering-Plough so much, investors would have to believe the FDA was going to pull Vytorin.

Cramer continued, "I would buy Merck too. ... This is a classic headline overreaction."

Cramer concluded by saying he prefers Thornburg Mortgage ( TMA) and Toll Brothers ( TOL) to Fannie Mae ( FNM) and Freddie Mac ( FRE). "I just think that they're not investible. ... I didn't like them ... yesterday."

At the time of publication, Cramer was long Schering-Plough.

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, 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 Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. Click here to order Cramer's latest book, "Mad Money: Watch TV, Get Rich," click here to order his 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." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here.

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