This story has been corrected with regard to Jim Cramer's comments on Gilead.
NEW YORK ( TheStreet) -- Karen Short, an analyst at Deutsche Bank, "has been dead right" about Safeway ( SWY), according to TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio.
Short said Safeway was a buy based on fundamentals when it was trading at $32 per share, and suggested that a buyer would acquire it -- which Cerberus recently announced it would do, at $40 per share.
However, Cramer said, "she's sticking with her idea that Kroger (KR) is going to come back" and contend as a buyer for Safeway. Her opinion contradicts what most investors had assumed.
He called Kroger a "well-run company" that doesn't want to load its balance sheet with debt. But he said he didn't want to be against Short, either.
Turning to biotech, "Stifel defends Gilead Sciences (GILD) today" after a rumor that Merck (MRK) has a better hepatitis C drug, Cramer said, which may explain the recent weakness in Gilead's share price. However, all the biotech stocks have been getting hit over the past few trading sessions, Cramer said.
This could be an indicator that the economy is finally improving, allowing investors to feel comfortable enough to move out of biotech -- one of the best-performing sectors in the past year -- and into other sectors and stocks.
"That would be remarkable," Cramer said. "It's been the greatest place to be."
With all of the M&A activity, IPOs and positive press, these stocks haven't "been able to get out of their own way," he concluded. Now, investors may be finally taking a rest.
- - Written by Bret Kenwell in Petoskey, Mich.