Jim Cramer’s ‘Mad Money’ Recap: This Stock Market Is No Bargain
Jim Cramer’s ‘Mad Money’ Recap: This Stock Market Is No Bargain
ByScott RuttFollow|08/06/15 – 08:12 PM EDTSearch Jim Cramer’s “Mad Money” trading recommendations using our exclusive “Mad Money” Stock Screener.
NEW YORK (TheStreet) — Not every falling stock is a bargain, Jim Cramer warned his Mad Money viewers Thursday. Some are falling knives that will only lead to bright red losses.
Cramer explained that all throughout the market’s incredible run over the past few years, buying the dips has always been a winning strategy. Waiting for a stock you love to fall to a bargain price and then pulling the trigger has served investors well for a very long time. But with over 60 stocks in the Dow Jones Industrial Average making new lows and entire sectors faltering, that strategy may be a thing of the past.
The weakness that started in coal and quickly spread to iron ore and copper and the railroads has now claimed much of the oil patch, from the highly levered firms to the mid-tier companies and, most recently, even the major oil stocks.
in the industrials and technology and, yes, even
But while the selling may be over in stocks like Walt Disney (DIS – Get Report), which saw sharp declines earlier this week, for many stocks, trying to catch a bounce remains illusive. In fact, Cramer said the only market leader appears to be Netflix (NFLX), and that stock isn’t taking anyone else along for the ride.
That’s why Cramer told viewers to have some cash on hand and remain on the sidelines because it’s still not safe to go back into the water.
Executive Decision: Brent Saunders
For his “Executive Decision” segment, Cramer sat down with Brent Saunders, president and CEO of
Allergan(AGN – Get Report)
, the biotech that delivered a 3-cents-a-share earnings beat on better-than-expected revenue thanks to a terrific pipeline with over 70 products under development. Allergan is an AAP holding.
Saunders first addressed a Department of Justice inquiry into Allergan for its pricing of generic drugs, a division which the company is now selling to Teva Pharmaceuticals (TEVA). Saunders said the investigation is a non-issue as the price increases in three of its generic drugs were simply supply and demand issues.
When asked about his plans for Allergan’s war chest of cash on hand, Saunders said Allergan is known for making bold acquisitions and he continues to tell his staff to be bold in their thinking.
Allergan will always deploy its capital for long-term growth, he added.
Finally, Saunders commented on Allergan’s new Alzheimer’s drug, which he said should be eligible for reimbursement from Medicare in the beginning of 2016. He also noted that Allergan’s efforts in creating a breakthrough for depression continues to go well, although it remains in the early stages.
Is It Disney’s Time?
With the media stocks continuing their free fall, is it time to start picking up
? Well, almost.
Cramer said Disney remains the best integrated media stock in the universe, but when big institutions begin selling and adjusting their models for slightly lower growth, it can take at least two days for the selling to subside.
While it’s true that Disney’s cable subscription business is
, Cramer said it’s stupid to think that management doesn’t have a plan to combat the weakness. Disney’s sports content easily transitions to a streaming model after all, far better than any other media company’s content.
That’s why Cramer said Disney remains a buy over the long term and why his “buy on day three of a selloff” rule still applies. Institutions will complete their selling tomorrow, he said, and that’s the time to start nibbling at the bottom.
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Jim Cramer’s ‘Mad Money’ Recap: This Stock Market Is No Bargain