Among the stocks that Cramer looks for if he thinks an economic downturn is coming are the medical device companies. One such company, Hologic , specializes in women’s medical equipment and is involved in an “exciting” merger with Cytyc . In fact, Cramer thinks the merger is so exciting that he’s been buying the stock for his charitable trust even though it’s been getting hit. Maybe investors need to know more about the synergies of the merger, so Cramer got Hologic CEO Jack Cumming on the line to learn more.
When the merger is complete, Cumming said the company will have $1.7 billion in sales – 60% of the revenue will be from consumable products and 40% will be from capital goods. The new company will also have the “largest dedicated sales force in women’s health in the U.S.,” Cumming said. The company has a management team that has dealt with acquisitions before so Cumming isn’t worried that integration will be an issue, he said.
Cramer expressed concern about the financing for the deal. “Whenever I hear financing and a takeover I get worried,” he said, because so many companies get hit mercilessly when they try to get the money to make these deals happen.
Cramer thinks the idea of a one-stop women’s health and diagnostic company is a winner. The stock is down, however, and he’s taken a hit for his charitable trust, but he’s still a buyer here. “I think it works.”
Jim's charitable trust owns Hologic and Goldman Sachs.
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