Cramer's Mad Money - Beating the Bad News Bears (3/13/09)

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 |  Includes: AAPL, AIPC, BAC, BBRY, BIIB, BMY, C, CELG, CEPH, CGRB, GE, GM, SNY, WMT, X
by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday March 13.

Beating the Bad News Bears: General Motors (NYSE:GM), Bank of America (NYSE:BAC), Citigroup (NYSE:C), General Electric (NYSE:GE)

While most were happy to see the rally last week, not everyone was celebrating. Hedge funds with huge short positions were betting against the market and losing. Retail's return from oblivion, General Motors' turning down $2 billion in government aid and Bank of America's show of profitability was good news the bad news bears did not want to hear. Mark-to-market reforms, the reinstatement of the uptick rule, the sentencing of Bernie Madoff and Warren Buffett's appearance on CNBC were all bullish signs that made the bears growl. General Electric popped in spite of a downgrade, and downgrades have not been so aggressive in general. Mergers in biotech also were a sign of health. Cramer says that these bearish institutional investors will have to come out of hibernation and start to get long. When this happens, the Dow could go to 8,000.

American Italian Pasta (AIPC), Wal-Mart (NYSE:WMT)

Pasta is a great dish for people who want to save money, and Cramer thinks this tradedown play will "explode higher." American Italian Pasta supplies Heartland, Golden Grain and Muellers brands but is diversified into private labels and is the sole supplier to Wal-Mart for its private label pastas which comprise 22% of the retail giant's sales. American Italian Pasta is the "king of cheap pasta." Lower raw costs will benefit the company, which has already seen its stock price rise from $4 to $30 while other great food stocks have fallen in the other direction. The company is only covered by four analysts and might attract more attention. Since the stock has already had a big run, Cramer would wait before buying and use limit orders.

Mad Mail: Research in Motion (RIMM), Apple (NASDAQ:AAPL), U.S. Steel (NYSE:X)

When one viewer asked why Research in Motion isn't keeping up with Apple, Cramer replied: "It really is just a question of what company is closer to perfection. And Apple keeps doing well. I think Apple’s expensive, but you know I like it. I think RIMM is cheap, and I like it. But that has not been a moneymaker in the latter, and it’s been a moneymaker in the former.”

Cramer told another viewer that he won't make a bullish or bearish call on U.S. Steel before having the CEO, John Suma on Mad Money.

Cramer reiterated his call for reforms to correct unemployment and the housing crisis. He thinks mortgage at 4% interest should be available to everyone.

Cougar Biotechnology (CGRB), Celgene (NASDAQ:CELG), Biogen (NASDAQ:BIIB), Cephalon (NASDAQ:CEPH), Genzyme (GENZ), Bristol Myers Squibb (NYSE:BMY)

The biotech sector has been rich with takeovers, and Cramer says it is worth checking out new prospects. Cougar Biotechnology has a prostrate cancer treatment, Abiraterone, in Phase III trials, and the FDA has given it "special protocol assessment"; if accepted, the drug will have patent protection until 2017. Aibiraterone prevents the cancer cells from having access to growth-producing hormones, and studies show 71% of patients have seen a 50% improvement with the treatment.

Phase III trials will involve pre and post chemotherapy patients and are due out in the second half of 2009 and the first half of 2010. Prostrate cancer is difficult to treat and earlier treatments have not been successful for other companies. Cougar has two other drugs in the pipeline: one for blood cancer and another for prostrate cancer. The company is sitting on sufficient cash to wait it out, and if Aibiraterone is accepted, Cougar might get an offer from Celgene, Biogen, Cephalon, Genzyme or Bristol Myers Squibb. Cramer reminded investors that Cougar is a speculative play and should be bought after doing homework and in increments.

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