Cramer’s Calls on Omega Healthcare, InvenSense and More
You asked. Jim Cramer answered.
On Friday, the "Mad Money" host turned in his homework on questions he was asked earlier in the week.
Omega Healthcare Investors : This real estate investment trust currently pays a dividend yield of around 8 percent, which Cramer saw as a "red flag" because it seems "too big and too good to be true." After doing some research, he learned the REIT consists of more than 450 health care facilities across 34 states.
"While they are high quality operators, we're concerned that if Medicare reimbursement rate cuts come to fruition, the dividend may need to be reduced," Cramer said. "So avoid this REIT until we get clarity on reimbursement rates for their facilities."
InvenSense : This Sunnyvale, Calif.-based company makes MotionProcessor units, which is basically the technology embedded in chips that allows computers to track human motion for everything from smartphones to gaming devices and video cameras. From the sudden departure of its CEO to lowered guidance and broader macroeconomic-related worries, InvenSense has watched its stock decline for a number of reasons over the past few months, Cramer said.
"I say there's no need to be a hero with this one," Cramer cautioned. "While InvenSense might look attractive on a valuation basis, this stock can drift a heck of a lot lower along with the rest of tech. So stay away."
Greenway Medical Technologies : From its headquarters in Carrollton, Ga., Greenway Medical Technologies provides integrated information technology solutions and managed business services to ambulatory healthcare providers. It recently won a big customer, too, namely Walgreen, Cramer said. Greenway will provide electronic medical records to more than 8,000 Walgreen's stores over the next several years, he noted.
Even so, Cramer said the stock is just "too expensive to touch right now." He suggests waiting for a pullback before buying shares.
(Related: Four Tech Stocks to Consider.)
Dynavax Technologies : In September, Cramer recommended this drug manufacturer's stock, but only on a speculative basis. He had high hopes for its hepatitis B vaccine. On Thursday, however, the U.S. Food and Drug Administration voted unanimously to recommend the effectiveness of the vaccine, Heplisav, but raised concerns about its safety, asking for more data from studies on a wider population. In turn, its stock ended sharply lower Friday.
"I'm confident the company can overcome the inadequate safety data and I think the brutal hammering in its stock today was an overreaction," Cramer said, adding that he thinks the company will work with the FDA and otherwise has enough cash on hand to get by. "I'd be a buyer of Dynavax down here and I'm on the lookout for positive news developments leading up to and beyond their final FDA meeting on February 24."