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NEW YORK ( TheStreet) -- Panic is not an investment strategy, Jim Cramer told his "Mad Money" TV show audience Tuesday in a special on-the-road episode from the International CTIA Wireless conference in New Orleans. Cramer reminded investors that no one ever makes money selling into a panic and often the best strategy is to stand your ground and wait for a better price to sell. Cramer acknowledged that the chaos in Europe, along with a host of scary news from companies like Scotts Miracle-Gro ( SMG), Rackspace ( RAX) and Fossil ( FOSL), did indeed rattle the markets. But should investors rush for the exits and sell their entire portfolios? Cramer thinks not. Cramer said when he sees selling like today, it's clear that investors either don't know what they own, or are just selling in fear. Because when you think about it, how does a slowdown in Europe affect companies like Macy's ( M), Bed Bath and Beyond ( BBBY) or Ross Stores ( ROST), three retailers that posted spectacular results? It doesn't. The prevailing wisdom seems to be that falling oil prices is bad news, as it signals the global economy is slowing. But isn't cheaper energy exactly what companies like Hershey ( HSY) and Kimberly-Clark ( KMB) have been hoping for? It is. Cramer said it simply doesn't make sense to sell everything all at once. And indeed, when stocks like Fossil report bad news, the opportunities created in stocks like VF Corp ( VFC) and Ralph Lauren ( RL) are compelling. "There's always a better time to sell," Cramer concluded. But the smarter move is not to sell at all, but to pick through the rubble and buy what makes sense.
Executive DecisionIn the first "Executive Decision" segment, Cramer sat down with Ralph De La Vega, president and CEO of AT&T Mobility, the wireless arm of AT&T ( T). Cramer called AT&T the "ideal stock to own" in this market as the company has zero exposure to Europe. It's been a year since AT&T announced plans to buy rival T-Mobile, and De La Vega said the company has now put the failed merger behind it and is looking forward. He said the company posted record smartphone sales and is seeing its data business rise by 20%. Meanwhile, customer churn is down and AT&T's stock is flirting with 52-week highs.
When asked about his business, De La Vega noted that AT&T has more choices in devices than it has ever had before, with strong competitors from Apple ( AAPL), Android and Windows Mobile. He said the company's new tiered pricing plans have expanded the smartphone market with lower price points for light data users. De La Vega was also upbeat about AT&T's future, noting that since the failed merger, the company has executed well and has new services in the works that will be announced later this year. Cramer continued his recommendation of AT&T, a stock with a juicy 5.2% dividend yield. In the second "Executive Decision" segment, Cramer once again sat down with Dan Hesse, chairman and CEO of Sprint Nextel ( S), a stock that's struggled since it began carrying the iPhone. Hesse acknowledged that Sprint is paying a hefty upfront premium to carry the iPhone, but added that so far 44% of new activations have been new customers to Sprint. He said the decision to carry the iPhone was the right one, even with the high upfront costs. Hesse also commented on the lack of visibility surrounding the shuttering of its Nextel network at the end of 2013. He said that operating the Nextel network is very expensive and Sprint will be competing aggressively to transition as many customers as possible to a similar push-to-talk service on its new next-generation network. When asked about the company's financial position, Hesse said he understands investors' concerns that the company is investing too heavily and burning through its cash. He said Sprint wanted to invest as soon as possible in both the iPhone and its Network Vision LTE network, and ultimately chose to do so at the same time. That said, the company has also been able to successfully raise cash. Hesse said he doesn't feel the company is at any financial risk. Finally, when asked whether Sprint may be interested in purchasing rival MetroPCS ( PCS), Hesse responded with a "no comment." Cramer said he's a believer in Sprint's turnaround efforts.
Continuing with a third "Executive Decision" segment, Cramer also spoke with John Riccitiello, CEO of Electronic Arts ( EA), a stock that's down 30% so far this year, trading at just nine times earnings despite $4 a share in cash on hand. Riccitiello said that he feels investors will eventually catch up with Electronic Arts' performance, saying that as the company transforms into a larger social and mobile gaming player, investors will see the value. As that change is taking place, however, Riccitiello said that the markets usually discount a stock. Riccitiello compared his business to that of rival Zynga ( ZNGA), a leader in the social and mobile gaming space. He said that while Zynga is a good business, Electronic Arts is a great one with better intellectual property, successes on multiple platforms and franchises like FIFA soccer, John Maddenfootball and The Sims. While Zynga grows through acquisition, said Riccitiello, Electronic Arts can grow organically. Riccitiello also discounted worries about the company's latest Star Wars release. He said that Star Wars remains a solid success and is a top 10 franchise for the company, but is not in the top five, as some analysts mistakenly expected. With Electronic Arts expected to release a total of 41 mobile and social apps this year alone, Cramer said that Electronic Arts is among the cheapest stocks he follows.
Eyeing VertexOh what a difference a day makes. That was certainly the case with Vertex Pharmaceuticals ( VRTX), a stock that surged 55% yesterday on positive phase II results for the company's latest cystic fibrosis drug. Cramer's take, this speculative stock is still worth buying on any pullback. The stock gained another 10% today after two more analyst upgrades on the prospects of its treatment for cystic fibrosis. Cramer said with Monday's news, Vertex should be viewed as a completely different company. Last year, his recommendation was based on Vertex' hepatitis C business, but today the company's opportunities to treat cystic fibrosis are all that matters. So why was Monday's news so important? Cramer said it's because the news was a game changer for the company and it was news that Wall Street was totally not expecting. He said the analysts didn't even factor in the drug's potential after disappointing phase I trials, but now the drug could be a blockbuster.
Cystic fibrosis may be a rare disease that only affect 30,000 Americans, Cramer concluded, but when the data say that your drug could successfully treat 46% of them, that news is a game changer.
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