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While Wall Street had feared the worst for health-care stocks, as President Obama set his sights on reform, Cramer said that just one group within the sector would be targeted: HMOs. Any company that got fat feeding at the federal trough is probably in trouble.

Cramer pointed to Medicare’s Advantage program as one government initiative by which health maintenance organizations have profited greatly. He expects Obama’s legislation to curtail that, as well as protect consumers who feel “ripped off” by HMOs.

“This is the most egregious industry of all industries,” Cramer said. “[It] generates gigantic cash flow and really has just done the wrong thing with it consistently.”

Cramer recommended WellPoint [WLP  Loading...      ()   ] because it has much less exposure to Medicare Advantage than UnitedHealth [UNH  Loading...      ()   ], Aetna [AET  Loading...      ()   ] or Humana [HUM  Loading...      ()   ].

Cramer also endorsed Boston-Scientific [BSX  Loading...      ()   ], a biotech firm operating outside Obama’s focus, on the successful trial of a new heart device.

Elsewhere in the market, a private-equity firm’s $350 million investment in Office Depot [ODP  Loading...      ()   ] has eliminated at least one reason for owning Staples [SPLS  Loading...      ()   ], Cramer said. Just a year ago, ODP was struggling, making a growth in market share for Staples seem inevitable. But with the new cash infusion, the competition between these two retailers is back on.

“That makes me like Staples less,” Cramer said.



















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