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.
Oh 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.