Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday March 6.
Obama's Medicare reforms brought down the healthcare sector, flattening stocks once regarded as recession-resistant. However, two names may end up surviving Obama's healthcare reforms: Becton Dickinson and Baxter. Cramer called these companies "the Wal-Marts of healthcare" because they make essential equipment and products which will continue to be purchased even as times get tough. Becton Dickinson gets 58% and Baxter gets 37% of revenues from hospital supplies which always need to be replenished. These include syringes, needles, scalpels and drug items. Thirty percent of BDX's revenues come from diagnostics and only 6% from "extras." A large portion of Baxter's revenues are derived treatments for hemophilia, immune deficiencies and cancer; these are a far cry from the high-cost drugs Obama's reforms may threaten. Baxter also makes IV care products and injectible drugs, which are required for many different procedures. While both reported decent quarters, Baxter was a bit light on revenues. However, both companies should perform well in 2009. Cramer noted both Baxter and Becton Dickinson's multiples are at historic lows, and would go ahead and buy.
1. Retail: Wal-Mart's same-store sales were better in February than they were in December. Big Lots and Family Dollar are also strong. Sure, these are tradedown plays, but in a deep recession, even these stores would be feeling the pain.
2. Tech: Semiconductors' inventories are growing smaller and Qualcomm's estimates were raised because chips are doing better thane expected. While there is some doubt about the health of end-markets (Hewlett Packard CEO Mark Hurd is not optimistic), the Philadelphia Stock Exchange semiconductor index was up over a terrible December.
3. Commodities: Copper is on the rise, oil has stopped dropping and there is increasing demand for metals. While China, not the U.S., is fueling demand, at least it is good news for American companies.
4. Dividends: Some companies, such as Coca-Cola and Kimberly Clark are actually raising their yields.
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