Mad Mail: Medco or Express Scripts?
Mr. Cramer: On Monday you highlighted “visibility stocks,” one of which was Transocean. You admitted that every time oil goes down a buck the stock takes a hit, but you insist it’s undeserved because of their long-term contracts. I agree with you in theory, but in a stock that hasn't paid a dividend in nearly six years, why should I care about reality when perception rules the value of my portfolio? I'm a young person - still a student - and a new investor, and this question is applicable to a number of stocks. I'd appreciate it if you could explain how to deal with this paradox…educate me, Jim! --Mark
Cramer says: Transocean is a pure growth stock. The company doesn’t want to pay a dividend. It just wants to keep returning capital by making the stock go up. Yes, conservative investors want a dividend. But RIG has growth, and “growth is what the market really loves.”
Dear Jim: Last night, you recommended Medco Health Services and it looks intriguing. However, I already own Express Scripts and have been rewarded there. Does it make any sense to switch to MHS, or add a position in MHS, or would you recommend increasing my investment in ESRX? --Jan
Cramer says: “ESRX is really good. I would not switch. I like Medco a little bit more. But I owned Express Scripts and made a bit amount of money in my charitable trust.”
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