Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Thursday October 25. Click on a stock ticker for more analysis:
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Let the Gamestop (NYSE:GME) Begin
Continuing his series of picks based on Penn's book Microtrends, Cramer discussed the surprising yet promising statistic that average age for video games players is 33, with only a third of games designed for players under 18. This is good news, because an older player will be willing to spend more money on video games. While most game producers are "too inconsistent" to consider as investments, Cramer likes GME because it is a "pure play" in this area. Margins for the used game business are up 50% and Cramer would go ahead and buy GME now since it has dropped, even though summer is usually the prime time to buy stocks in the sector. GME plans to release new products early in the year.
Related: Eric Savitz Reports Citigroup and Credit Suisse are bullish on video games.
Psychiatric Solutions (OTCPK:PSYS)
In a crazy market, Cramer would consider buying PSYS because "It is just a solid, consistent medical services provider," is immune from subprime, and has strong secular growth. Since one in five Americans suffer from a mental illness at some point in their lives, PSYS' services are essential, and since Congress is currently discussing ways to extend mental health coverage, PSYS is a good election play and is "ripe for consolidation."
Lonnie Smith commented that the quarter was a continuation of the company's past strong performance. When Cramer asked how well ISRG's products fare overseas, Smith replied that it depends on how much choice is given to patients, but almost every patient is looking for the least-invasive procedure, which is ISRG's specialty. When asked why ISRG sold its stake in Hansen Medical, Smith explained the company does not want to invest in minor positions over the long term. Cramer said, "This stock is for real and this company is for real. We're sticking with it, it goes much higher."
Related: Notable Calls warns that ISRG may have reached its peak.
Sell Block: Align Technology (NASDAQ:ALGN), Lululemon (NASDAQ:LULU), Research in Motion (RIMM), Celgene (NASDAQ:CELG)
Cramer apologized for having recommended ALGN which dropped nine points after announcing its CFO was leaving even though it reported a better-than-expected quarter. He urged viewers to sell it and said it was "one of the worst calls" he has made so far this year. Cramer would sell all of Hansen Medical because it has reached its peak. Cramer would sell 50% of LULU and 50% of RIMM because both have had a huge rise. Although there has been some selling in CELG, Cramer is still bullish, and invited COO and President Bob Hugin who explained that while sales were "good and strong" expectations were higher and the company is still in the process of expanding into Europe. Also, he didn't think the numbers accurately reflected the demand for Revlimid, and adds even domestically, "things look very promising."
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