Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday November 1.
CEO Interview: David Pyott, Allergan (NYSE:AGN)
Allergan (AGN) has a diverse range of products, from breast implants to eyelash enlargers, but Cramer predicts the real growth for the company is going to come from the use of Botox for chronic migraines. Given the sheer number of chronic migraine sufferers, the treatment could generate $250 million to $1 billion a year. Allergan is also testing Botox as a treatment for overactive bladders, and the results should be available by 2012.
The migraine treatment has already been approved by the FDA and Pyott says the next step is to train physicians on how to administer the series of 32 injections. While the company is facing competition in its beauty treatments, this segment continues to grow overseas. Allergan's eye care segment is now generating close to 50% of the company's revenues. The company's Lap-Band business has been underperforming and Pyott acknowledges more advertising is needed to promote the product. However, Cramer is a believer in Botox for migraines and predicts the stock will reach $100.
The current economic situation is often described as "fragile," but that is only looking at the domestic situation. Globally, the economy is actually resilient. While President Obama's proposed reforms are hurting business, this fact doesn't affect Germany, which is seeing its lowest unemployment growth in 19 years or exuberant growth in China, India and Brazil. The latter economy will only continue to expand as the Olympics draw close, and Australia and Canada are on "incredibly firm footing."
Cramer told one viewer that after trying to find a good play off of Apple (AAPL), he decided Apple is the best way to play Apple. Cisco (CSCO) hasn't moved much in five years and is still in the $20s. Cramer said he would scale back on Cisco because he doesn't think the stock has much momentum. B&G Foods (BGS) is a good company that pays a solid dividend. Campus Crest Communities (CCG), which Cramer recommended on September 27, is a great play on college housing.
CEO Interview: CEO Bob Bruggeworth RF Micro Devices (RFMD)
RF Micro Devices (RFMD), which makes chips that enable mobile phones to communicate with networks, is a great way to gain exposure to smartphones, since $5 to $6 worth of RFMD's product goes into every phone. The stock is up 109% since Cramer recommended it in 2009 and has risen 15% since its solid quarter a week ago. While the stock is still cheap and trades at a multiple of 10 compared to a 15% growth rate, Cramer wondered if RFMD has more upside.
Bruggeworth said the company has eliminated $400 million in debt over the last two years because of its product development and secular trends. He predicted RFMD will continue to take market share, and has already begun to grab a foothold in China. RFMD is working on technologies, such as cable TV power amplifiers, which improve energy efficiency. Cramer thinks that RFMD has more room to run and says it is a buy.
Jim Cramer was up 31% in 2009. Click here now to sign up for Jim's Action Alerts PLUS and trade alongside him. Special discount for Seeking Alpha users.
Get Cramer's Picks by email - it's free and takes only a few seconds to sign up.