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NEW YORK (TheStreet) -- Conventional wisdom says you just can't make money in individual stocks anymore, Jim Cramer said on Mad Money Wednesday. But does that mean investors should just invest in the averages and settle for average results? Absolutely not.
Why own the entire S&P 500 index when you can own the best stocks in each sector? Cramer asked. Today Pepsico (PEP), led by the "bankable" Indra Nooyi, reported a fabulous quarter and guided estimates higher. Cramer said it wasn't that hard to see Pepsico was among the winners in the consumer packaged-goods space.
Then there's the speculative Puma Biotechnology (PBYI), a stock that jumped a stunning 295% in today's session after the company's breast cancer drug showed positive results. Cramer admitted that many investors may have never heard of Puma, but with a little homework they might have come across this long-shot therapy and been able to profit from it.
The winners in the market are out there, and they're not that hard to find, Cramer said. That's why investors should never settle for exchange-traded funds and index funds that just follow the averages. After all, who wants to be just average?
Is the next generation of biotech stocks outpacing the old-school big pharma names? Cramer said that appears to be the case -- Cramer's "four horsemen" of Celgene (CELG), Gilead Sciences (GILD), Regeneron (REGN) and Biogen Idec (BIIB) all posted strong gains, while the old-school GlaxoSmithKlein (GSK) appears to be withering before our eyes.
Cramer said it's clear that sales are dwindling at Glaxo as the competition from cheaper, generic alternatives continues to grow. The company was even forced to halt its share buyback program amid the weakness. While a few years ago Glaxo might have been able to buy one of the four new market leaders, today their market caps have grown while Glaxo's has shrunk to a point where an acquisition is out of the question.
The times are indeed changing, Cramer concluded, and his four horsemen are pulling further ahead of the pack.