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Cramer Remix: The drug stock that's 'downright toxic' for your portfolio

As Jim Cramer digested the stunning victory of Donald Trump, he realized the stock market would suddenly become a very different place with different sectors leading the charge.

"The biggest impact of this shocking election is probably on the healthcare group," the "Mad Money" host said.

For over a year, the prospect of Hillary Clinton winning the White House has weighed on drug stocks, especially after she tweeted about cracking down on pharmaceutical price gouging in September of 2015.

But with a Trump regime entering Washington, those worries have pretty much been taken off the table. The Republicans are all about limited regulation and free markets. Thus, Cramer doesn't expect them to crack down on drug pricing because it would stifle innovation.

"For the segments of the health care sector that don't have price wars, I think we need to get a lot more positive because these stocks have more room to run," Cramer said.

Cramer warned to also stay away from Valeant's ugly balance sheet that made the stock "downright toxic," and while CVS seemed to have headwinds after reporting a mixed quarter, he thinks most of the weakness is CVS-specific.

Donald Trump speaks to supporters as he celebrates his Presidential win at his election night event at the New York Hilton Midtown in New York City on Nov. 9, 2016.
Jessica Rinaldi | The Boston Globe | Getty Images
Donald Trump speaks to supporters as he celebrates his Presidential win at his election night event at the New York Hilton Midtown in New York City on Nov. 9, 2016.

Many investors were confused as to why stocks entered a mini-bear market and then a bull market within the same 24 hour period following the news of Donald Trump's election into presidency on Wednesday.

Cramer broke down what happened for investors in plain English. After all, he was also puzzled.

"The simple fact is there were a heck of a lot more people who wanted in after this election than wanted out, and a gigantic number of hedge funds who were on the wrong side of the trade and had to reverse their stance," he said.

Cramer doesn't want to throw cold water on the rally, but he's willing to bet that investors won't be talking about Donald Trump or Hillary Clinton by next week.

"I'm saying that we will be stuck in a world of some unknowns that will be a source of anxiety, and therefore selling," Cramer said.

Once the euphoria dies down, Cramer expects focus to once again resume on the Federal Reserve, mergers and whether Trump will convince Congress to kill NAFTA. Investors will worry about who will be chosen as Treasury Secretary, a possible trade war in China and the price of oil.

Soon, these realities could be very sobering for investors.

"So, don't get cocky. Relief rallies don't last when faced with a new set of facts, unless they are positive. Otherwise, they just tend to fade away," Cramer said.


The early morning sun begins to rise behind the White House.
Getty Images
The early morning sun begins to rise behind the White House.

With talks between Chipotle Mexican Grill and hedge fund billionaire Bill Ackman intensifying recently, Chipotle's CFO Jack Hartung shed light on the discussions to Cramer on Wednesday.

"The dialogue we have had with Pershing has talked about driving long-term shareholder value. Talks about recovering the business model and from what they have said so far, they believe that Chipotle is a special brand we are going through a tough time right now," Hartung told the "Mad Money" host.

Ackman took a nearly 10 percent stake in the company two months ago, but did not disclose his strategy. Chipotle also recently hired a law firm, investment banks and public relations company to help engage with the billionaire.

Carrizo Oil & Gas recently joined the club of oil companies on Cramer's favored list that sell their own stock to make smart acquisitions to take advantage of lucrative drilling real estate.

Carrizo is a $2.2 billion independent exploration and production company with operations in the Eagle Ford shale, the Permian Delaware Basin in Texas, Utica shale in Ohio, Marcellus shale in Pennsylvania and Niobrara formation in Colorado.

In late October, Carrizo bought 15,000 acres in the Eagle Ford shale from Sanchez Energy for $181 million in cash. In order to pay for the deal, it priced a 6 million share secondary offering at $37.50. While the stock pulled back initially, it bounced back to close at $37.35 on Wednesday, and recently reported a strong quarter.

Cramer spoke with Carrizo's CEO Chip Johnson, who commented on the positive nature of Republicans for business.

"I think the Republicans are always going to be a little bit more business friendly than the Democrats, so that can work out to our advantage and maybe some of these pipelines will get built that will reduce rail traffic," Johnson said.

In the lightning round, Cramer gave his take on a few caller favorite stocks:

Extra Space Storage: "No, rates are going higher. That's that whole point of what happened today with the 10-year bond. So no, we are going to stay away from that stock right now until we get a little bit higher yield by having the stock go lower."

HCP Inc: "Right now I'm a little down on medical buildings. There is some weakness in the sector. We are going to just stay away."