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Did you miss last night's "Mad Money" on CNBC? If so, here are Jim Cramer's top takeaways for next week's trading.
Amerisource Bergen (ABC - Get Report) , McKesson (MCK - Get Report) and Cardinal Health (CAH - Get Report) : For a long time, the drug wholesalers had a nice equilibrium, Cramer told viewers, a happy oligopoly with little or no real competition. But that all changed this quarter as Amerisource Bergen took aim at rivals McKesson and Cardinal Health, starting a vicious price war that sent shares of McKesson plummeting 22.6% and Cardinal down nearly 10%.
Amerisource has made it clear that it wants to increase market share, offering steep enough discounts on certain generic drugs to give independent drug stores the incentive to break their usual three-year agreements and jump to Amerisource.
While the price war may ultimately be great news for the likes of Walgreens Boots Alliance (WBA - Get Report) and other drugstore chains, for the three wholesalers -- which control 97% of the market -- Cramer said the damage could be extensive.
"Everyone gets hurt," Cramer concluded, and since it's hard to know where the pain will end, this group must be off-limits until further notice.
Shares of Avon hit $24 in 2013. Then they went into a downward spiral, hitting $2.50 in 2015. That was due to falling sales and bad management, Cramer said, which pressured gross margins and crippled earnings.
But then came a deal with Cerberus Capital, which provided a $170 million cash infusion and allowed Avon to focus on its high-growth international markets.
Since the Cerberus deal was announced, shares of Avon have slowly risen 165%, as the company had a plan and the means to execute on it. When it last reported, the company delivered a five-cents-a-share earnings beat with better-than-expected sales, and was able to clean up its balance sheet to boot. Additionally, Avon saw positive growth in nine of its top 10 markets -- news which caused analysts to start taking notice.
Cramer said while he feels the turnaround at Avon is indeed for real, the market has been brutal this earnings season, which made him caution to not buy Avon ahead of earnings and wait for weakness.
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