Sell Block

It’s time for Sell Block, that part of the show Cramer uses each week to tell you, the loyal Home Gamer, it’s time to take profits or cut losses. First in the block are the homebuilders, namely WCI Communities. Cramer originally liked this stock because Icahn is behind it, but it hasn’t been much of a win – and Cramer’s adamant that investors stay out of the homebuilder industry all together right now. Besides, Icahn’s $22 offer for the company is the only thing holding WCI up, Cramer says.

On a related note, Cramer wants you to take profits in Simon Properties if you have a position in the commercial real estate developer. Simon’s been a big win, and it’s time to ring the register.

Next in the Sell Block: Hologic. Cramer did like the stock at one point, but these days it has a sky-high multiple. It’s priced for perfection, Cramer says – and that perfection might not last. A story in The Wall Street Journal today sites a study that Hologic’s computer-aided detection mammography system – it’s main product line – registers 32% more false positives than when humans do the read.

Moving on to the rails, Norfolk Southern just came out with disappointing guidance. The company’s buying back stock aggressively, so Cramer recommends you wait for some strength as NSC stabilizes before swapping into Union Pacific.

Cramer Mea Culpa: Jim called a short-buster play on Greenbrier back on Jan. 30, but the company has since issued a report saying the shorts are right and Cramer is wrong. The stock is down big, and even though Cramer likes Greenbrier over the long term, he admits he blew this call.

Coldwater Creek is starting to come back a bit. Home Gamers probably remember that Cramer got burned on this one. He says that if the stock goes up any further – sell.

And don’t believe the hype from analysts that love semiconductor equipment stocks. These stocks can’t do well if the semiconductor companies themselves aren’t doing well. If you own any, Cramer says to get out pronto.

Back on Jan. 8, Cramer named Gilead his biotech stock of the year, and since then it’s been up over 20%. But now it’s just too expensive compared with Celgene, which he likes just as much. Swap over to CELG, Cramer says.

This one is only a half sell: the Altria-Kraft split-up. Cramer says dump Kraft and keep Altria. He recommended MO when-issued shares at $63, now they’re at $70 and still smoking.

Finally, Take Two Interactive. Over 40% of this stock has been sold short, but short-busting isn’t enough. We tried it with Greenbrier, and it didn’t work. Don't expect it to work for TTWO either.

Bottom Line: Time to sell WCI, Simon, Hologic, Greenbrier, Kraft, Gilead, Take Two, and swap out of Norfolk Southern and into Union Pacific.

Questions? Comments?