In Wednesday’s Stop Trading, Cramer gave viewers a look into his favorite health care play right now, the future of the movie industry and the truth about rumors surrounding Apple.
With all of the uncertainty concerning the future of America’s health care system, Cramer has been touting the potential profits in the HMOs.
His pick for the sector: Wellpoint. After the company has already experienced a good run so far in 2009, Cramer said “investors haven’t seen anything yet.” The multiple has been compressed for two years and along with its strong earnings power, says Cramer, who reasons that the stock has plenty of room to run, especially with what’s going on in Washington. Don’t take profits yet, he says, “Wellpoint is the winner.”
In the entertainment space, and after Cramer’s interview with Disney’s Bob Iger, he sees the possibility that a new cycle is beginning in the company’s movie division characterized by new releases in the coming year. He thinks the new movie “The Princess and the Frog” could turn out to be a billion-dollar brand for the company. Cramer likes Disney because of the franchise potential in extending this new brand, which may allow it to compound revenues through theme parks and toy licensing.
Following up on rumors that Apple is running into problems in production and roadblocks with iPhone distribution to major carriers like Verizon, Cramer has learned that these rumors are untrue, and doesn’t think these are reasons to sell the company.
As for the general market, Cramer thinks the market is doing “just fine” into the end of the year, especially when you consider the run the Dow took from its low near 6500.
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