Cramer's Stop Trading! CVS Can't Get It Together (2/3/11)

Includes: AGN, CMI, CVS, NEM, VMC, WBA
by: Miriam Metzinger

Stocks discussed on Jim Cramer's Stop Trading! TV Segment, Thursday February 3.

Vulcan Materials (NYSE:VMC), Allergan (NYSE:AGN), CVS Pharmacy (NYSE:CVS), Walgreen (WAG), Newmont Mining (NYSE:NEM), Cummins (NYSE:CMI), Fronteer Gold (FRG)

The bears were out to savage Vulcan Materials (VMC) and Allergan (AGN), because they expected poor quarters, when both companies gave positive surprises. Vulcan Materials' information may hint at a turn in housing and roads and Allergan is "a remarkable story" and is "the fastest growing major drug company in the world." While other drug companies are making their quarters by firing workers, Allergan is spending more on research and development and is finding new uses for its drugs. Cramer thinks the stock will go to $80 on the use of Botox for migraines and the lap band treatment for obesity. Allergan is also moving into the urology space and has a drug for incontinence; "There is so much good here," said Cramer.

The Newmont Mining (NEM) deal to purchase Canada's Fronteer Gold (FRG) is a "sign of desperation and prudence" as the company is eager to buy up entire fields in search for scarce supplies of gold. While January was not a good month for the yellow metal, whoever has been dumping gold is finished, and the New Year in China means that gold demand will increase. There are too many hedge funds that are short gold or at least not bullish enough on it. When asked if gold is somehow connected to the dollar, Cramer said the commodity has been up for ten straight years, regardless of the economic conditions; "They always try to correlate gold with something...that is largely out of stupidity and ignorance." Gold is simply a supply and demand story, according to Cramer.

CVS Pharmacy (CVS) has become the "poster boy for poor execution" and "can't really get it together." Cramer thinks Walgreen (WAG) should be 10% higher. He reiterated his bullishness on the truck industry; "We are in the fifth month of a 3 year truck cycle." He praised Cummins (CMI), which reported this past week and said it is a "tech company that just happens to make engines."


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