FEATURED SLIDESHOW
Who Is The Worst CEO?Mad Money needed new inductees for its
Wall of Shame, so we asked viewers for
nominations.
RECENT POSTS
- 4 Enemies of Bull Markets
- Experiencing Technical Difficulty?
- The Importance of Good Breadth
- How Big Money Rules the Markets
- Follow the Leader
- Mad Mail: Chesapeake Energy Is Hiring?
- Lightning Round: Royal Dutch Shell, Bank of America, RF Micro Devices and More
- Lightning Round OT: Harley-Davidson, Heartland Payment and More
- Cramer’s Christmas List
- Cramer: This Stock Offers ‘Plenty of Upside’
MAD MONEY FEATURES
PODCASTSWatch the Lightning Round whenever and wherever you want.
OFFICIAL MAD MONEY WIDGETGrab this all-in-one application and get recaps of the show sent right to your desktop or blog.
CRAMERS SOUNDBOARDAdmit it: You've always wanted to hit the "They
know nothing!" button. Here’s your chance.
CHECK OUT OUR PHOTOSCheck out Cramer on set, back to school, behind the scenes and more.
SHOP FOR MAD MERCHANDISEBuy Cramer books, bobbleheads and other Mad Money merchandise.
RING TONESPick up the phone! It's Cramer! New Mad Money sounds for your cell phone.
TEXT MESSAGE ALERTMad Money's mobile. Get show highlights sent to your phone.
Text Size 
Last week wasn’t hell for just Schering-Plough [SGP
Loading...
()
]. Merck took a hit as well after a panel of expert cardiologists, more or less, trashed the two firms’ joint-venture cholesterol drugs Vytorin and Zetia. But the market might have overreacted, Cramer said, making Merck a buy.
Here’s his basic thesis: Merck’s [MRK
Loading...
()
] down almost 25% for bad news from a joint venture that represents only 15% of the company’s sales. By that logic, Cramer said, Wall Street’s assuming Merck won’t make any money from Vytorin or Zetia ever again.
That doesn’t seem to be the case, though, given that new prescriptions are down, but not precipitously. Patients are still taking these drugs. The setback was a “speed bump for Merck,” Cramer said, but “the Street’s acting like [the company] just ran into a retaining wall.”
Estimates are probably way too low for Merck now, Cramer said. After this decline, he’s making MRK his number-one Dow pick. He seems to think it won’t be too long before we look back and wonder how we ever could have bought Merck at $41.
Here are a few reasons why:
* Pharma’s what you want to own during a downturn, and Merck’s 3.7% dividend should attract buyers to the stock, pushing up the share price.
* Merck has a pipeline of drugs expected to ring up $4.6 billion in sales this year.
* The company still has $5.1 billion set aside for a buyback. Merck’s management should prop up the stock – maybe even take it higher? – with this money.
Even if Merck returned to its historic valuation, the stock would jump $10 for a 25% gain. Once Wall Street realizes this company’s still standing – for good reason – despite the initial fallout of Vytorin-Zetia, that jump could happen.
“I think you want to be in Merck,” Cramer said, “before we get the counter-reaction to the market’s overreaction.”
Jim's charitable trust owns Schering-Plough.
Questions for Cramer?
Questions, comments, suggestions for the Mad Money website?
Data is a real-time snapshot *Data is delayed at least 15 minutes