Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Monday March 26. Click on a stock ticker for more analysis:
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Now that BSTE has risen on a takeover bid from Beckman Coulter, Cramer suggests selling and getting into a small diagnostic play which may have a similar story: Cepheid. The Veterans Administration is choosing between CPHD and BDX to provide staph-infection tests in hospitals, and the question isn't who the winner will be, but whether the deal will move the needle. Cramer doesn't think a contract will affect BDX, but will cause CPHD to soar. Also, CPHD is not likely to suffer if it isn't given the contract, may be an attractive takeover bid, and Cramer notes that while the Democrats detest Big Pharma, the diagnostics sector is "hot." He would wait three days and use limit orders when buying CPHD.
Benefit of the Doubt: Coach (COH) and VF Corp. (NYSE:VFC)
"I am a skeptical, cynical, paranoid man," confessed Cramer, but he added, "there are times - when trust will make you more money than distrust." He unveiled his new "Benefit of the Doubt" series during which he will discuss CEOs who are worth trusting even when they "mess up." He mentioned Lew Frankfort, CEO of upscale handbag manufacturer, Coach, who told Cramer in May that COH's missed number was a "one time thing." Those who paid attention doubled their money, said Cramer. Mackey McDonald, CEO of VFC is another name Cramer trusts and he said to use every dip in VFC as a buying opportunity.
New Template: PDL BioPharma Inc. (NASDAQ:PDLI)
Cramer introduced his new template: "Underperforming management, plus activist, equals money!" He used PDLI as an example, a company which gets millions of dollars in royalties, but “spent it like a drunken sailor." However, Third Point LLC has moved in to acquire 7.5% of the company, or 8 million shares; "Third Point is going to do all the heavy lifting," said Cramer, and will start making money for investors. The stock is estimated to go from $20 to $39 or $59.
Cramer told a viewer he preferred RIG to WFT because RIG has less exposure to Canada. Concerning DGX, Cramer said it has a big buyback and is cheap; "it is a bull stock."
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