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Cramer: Buffett's Next Acquisition Could Be a Pipeline

Monday, 28 Feb 2011 | 3:04 PM ET

Berkshire Hathaway's Warren Buffett said in his annual letter to shareholdersover the weekend that he is ready for a major acquisition. Could he be interested in a pipeline company? Mad Money's Jim Cramer said on Monday's Stop Trading! it could be possible.

Stop Trading! Listen to Cramer
Mad Money host Jim Cramer shares his views on the markets and his thoughts on what moves Warren Buffett might have up his sleeve.

Buffett's acquisition of Burlington was beautifully timed, Cramer said. "It's almost as if he recognized that we are in a free-trade moment where what Burlington has to ship from the west is just ideal to go to the ports," he added. "It was a brilliant acquisition."

Cramer thinks Buffett likes the idea of how to transfer energy from one place to another. Based on that, "I think the guy is ready to buy another pipeline company," Cramer said

He said Buffett could consider Energy Transfer Partners — "that's a very cheap stock. Enterprise Products is cheap. Linn Energy is cheap. And these are all companies that have that same function like Burlington, moving one thing to another as toll roads that produce a huge amount of cash flow," Cramer said.

Berkshire Hathaway, stock itself is still a good investment as well, Cramer said.

Cramer also likes Netflix over Amazon if the two stocks were pitted against each other.

"Netflix is definitely going to win, but these are high-multiple stocks," Cramer said. "You can't own either one right now."

There are various moments where it's not advantageous to own these stocks, and this is one of them, he pointed out.

"That's why I like a deep-in-the-money call option right here, maybe if you wanted to start buying soon, but remember, these are stocks that are trading vehicles," he said. "If you decide you want to trade Netflix, this isn't the level you want to own it."

If you're not going to worry about the near-term, however, Cramer said Netflix is a good stock to hold. But don't stand in front of the freight train hitting these high-multiple stocks right now.

Cramer also likes as a derivative play of the Nationwide Health Properties deal with Ventas the Senior Housing Properties Trust.

"Six percent yield — I think that makes a lot of sense," he said.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money Web site? madcap@cnbc.com

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