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Mad Mail: What’s the Best Health-Care Stock?

Dear Jim Cramer: I've been doing some research on health care stocks. Based on all the numbers I've seen, it appears that Aetna would be the best choice because they have the best return on equity and profit margins in that sector. However, the stock doesn't appear to be too highly rated by analysts. Is AET really the best? What am I missing if you think it's not? --Johnny

Cramer says: “Aetna is in the crosshairs of the government right now. And I would much rather prefer you to be in WellPoint, because there’s a big debate about some of the particular parts of Medicare that benefit Aetna. And if the president wins, Aetna loses [and] WellPoint wins.”

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Booyah Jim: I was watching your show the other day when you were discussing Select Medical Holdings as a solid IPO to invest in. I saw this morning that it is trading at $9.96 and they missed their estimated range. Do you still consider it a good IPO to go into, or are there underlying factors that made them miss the estimate? --Drew

Cramer says: “There are a lot of people who hate this company, Drew. I feel if you can get this under $10 and you hold it for about a month, I think you’d make 10% … I felt Select Med should have popped, and it didn’t. So I don’t want to turn it from a trade into an investment. You can cut your losses there if you want to. I do think the stock’s a buy.”

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Jim: Put down the cheap scotch, get off the cold linoleum floor and don't apologize for your recommendation of Annaly Capital Management. The massive dividend and DRIP strategy has brought NLY through the crisis. Your initial analysis was correct and you made me Mad Money. If only I'd listened to you about Pfizer. --Steve

Cramer says: “Thank you so much … Mike Farrell did get through this period, and the yield is intact. But sometimes I can’t take the pain … that one just got to me.”

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