Sell Block: Why Celgene's a Buy
Celgene, which is down $6, might seem to be the perfect candidate for the Sell Block, but it’s a buy as far as Cramer’s concerned.
The company reported a strong third quarter Thursday, but European sales of Revlimid, its blood cancer drug, weren’t good enough for Wall Street. Chief Operating Officer Bob Hugin told Cramer via phone that sales where “pretty solid,” but he knows analysts were expecting more.
Hugin said the problem was that Revlimid can be rolled out only one country at a time in Europe, and Celgene started with Germany. Rollouts in France and Ireland are coming in the next couple of weeks, so the prospects are good for a strong European performance, he said.
Celgene “remains bankable,” Cramer said. He recommended buying a position in CELG if the stock is downgraded Friday.
As for stocks that should be sold, Cramer had to admit he made a huge mistake with Align Technology , maker of Invisalign braces. Homegamers might remember he spotlighted the stock just last week. The stock dropped 34% in Thursday trading after lowering its guidance for the next quarter and announcing the departure of its chief financial officer.
Cramer can’t understand how a company can raise guidance for two quarters and then lower guidance for the next. He also found it strange that the CFO’s resignation would coincide with that revision. Something’s wrong with Align, and he doesn’t want investors anywhere near it.
Hansen Medical is also a sell. The stock is up $10 from where Cramer recommended it, so he recommended taking profits. A lot of people on the Street think Hansen is a takeover candidate because of its intellectual property agreement with Intuitive Surgical. Cramer doesn't think so - if Intuitive wanted to buy Hansen, they obviously wouldn't be selling their shares in the company. Others think that Hansen's stock will have the sort of run that Intuitive has been seeing, but Cramer doesn't buy that either; while Intuitive faces no competition, Hansen's got a solid competitor in Stereotaxis. Take profits before they become losses, Cramer said.
Lastly, both Lululemon and Research in Motion are up over 50% since Cramer recommended them. Don’t be a pig, he said. Take half off the table and let the rest ride.
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