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As Cramer is fond of saying, the wheels of capitalism are greased by our collective desire to look younger and more beautiful. That’s why he has long been recommending Allergan [AGN
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], the cosmetic behemoth behind Botox and silicon breast implants that he thinks is about as recession-proof as they come.
But now there’s an even better reason to buy Allergan: it could save lives. A front-page article in the New York Times this week pointed to a new study that found weight-loss surgery can help cure Type 2 diabetes in obese patients. The surgery, known as gastric banding, is basically a less risky and less expensive form of stomach stapling where a band is placed around the stomach to make it smaller and causes the patient to eat less.
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Allergan is on the frontlines of this procedure with its own proprietary gastric banding system known as the LAP-BAND. This will be the future of the company, Cramer said. Along with the 20 million Americans with diabetes, Allergan could be the winner if this takes off. And already resulting in complete remission among 73% of patients, it sure seems like it will.
The stock is down 7% from its high, marking a good entry point, according to Cramer. He would put on half a position before the earnings report on Jan. 30, and half after. The bottom line? Allergan is no longer just fake breasts and tight skin. Now it could help cure a life-threatening disease.
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