Seeking Alpha publishes a summary of Jim Cramer's stock picks every day including: Mad Money Recap, Lightning Round, Stop Trading and his Wall Street Confidential Picks.
Although Cramer prefers big farms to big Pharma, he devoted an entire program to discussing drug companies people keep asking him about, because "most of you are going to do whatever the heck you want, so I'm here to minimize the damage." The sector suffers from the ailments of patent expiration, generic competition, FDA wavering, slow growth and lawsuits, but some drug companies are worse than others. At the bottom of the barrel sits JNJ and PFE, which is "the worst of both worlds .... Patent expiration, weak pipeline." Cramer says "Buffett's wrong" about JNJ with it patent protection problems and no new big drugs on the horizon.
Related: Berkshire Hathaway recently increased its stake in JNJ.
For those who are addicted to the drug sector, there is LLY, which is a stock Cramer could "live with" although its biggest drug, anti-psychotic treatment Zyprexa, is facing tough international competition. However, LLY has a blood clotting drug, Prasugel, in the pipeline, along with Cymbalta, Humalog and Cialis. Cramer thinks SGP is better than okay and is even "worth owning." He credits CEO Fred Hassen for the company's recent comeback, and thinks the government "may lift its consent decrees that it slapped on the company for sloppy manufacturing," a move which will result in cost-cutting and improved margins. Although Cramer doesn't like SGP as much as his top 3 pharma stocks, he would pull the trigger when it moves from $30 to below $28.
Cramer says WYE has less exposure to competition from generics than many other drug companies, and although it is losing patent protection on treatments, it has many drugs in the pipeline, including an Alzheimer's drug. Prevnar, a vaccine for meningitis and Enbrel, a drug for arthritis are doing well, and Cramer thinks Primarin, a menopause treatment, makes the stock a good baby boomer play. However, Cramer's favorite drug stock is NVS which has very low exposure to generics and $8 billion in cash after spinning off Gerber and a medical nutrition business. It "owns" the hypertension section, has substantial patent protection and a great pipeline. At $54, NVS is down 5%, 7 points from its high point, and is "the real anomaly right now in this group. It is a bargain in big pharma. "
Related: Teva beat NVS in a recent generics case.
CEO Interview: Joe Moglia of TD Ameritrade (NYSE:AMTD)
Joe Moglia told Cramer he is resisting pressure to merge with E*Trade and does not intend to let money managers interfere with what he believes is best for the company's shareholders. He added he is obsessive about ensuring employees adhere to the business plan and believes, after the bubble popped in 2000, the typical investor today is more sophisticated buying and selling according to how the stock moves.
Related: Short Thesis Investor discusses AMTD's stock spam problem.
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