A few weeks ago, Cramer recommended a small biotech stock called Nastech that ran up 13% after his approval. Nastech doesn’t have earnings, and it doesn’t have anything big on the market, yet it still could have made you 13%. Biotech stocks work in a strange way, and Cramer wants to teach you how to invest in them. He's been looking for the next Nastech, and he thinks he found it in Incyte .
Both Nastech and Incyte have some things in common. They are both well capitalized with lots of cash in their balance sheets (Incyte especially, with $330 million in cash and a market cap of only $580 million), and both companies are cheap, single-digit stocks. This is all good, but it isn’t what takes a biotech stock higher, Cramer says.