Cramer started Monday’s Mad Mail by revisiting three stocks that stumped him during previous Lightning Rounds. He gave the thumbs-down to American Capital Agency , saying the 19% dividend yield was a red flag. Also, the Federal Reserve could threaten the company’s profits if it decides to increase interest rates. American Capital Agency makes its money through the difference between the rate at which it borrows and the interest it earns on its mortgage-backed securities. A Fed move then could crush the stock.
Fuqi International , on the other hand, is a good way to speculate on the growing Chinese middle class. This small $645 million jewelry maker holds a strong balance sheet and is up 580% since the March lows. Still, the stock trades at just eight times 2011 earnings. Fuqi took a hit after announcing a short fall in revenues, but regardless Cramer said he thought it was “a pretty solid quarter.”
Lastly, Cramer called Genomic Health “a very speculative cancer diagnostics play.” The company makes genomic-based clinical lab services for cancer that allow doctors and patients to make individual treatment decisions. One test, which quantifies the likelihood of disease recurrence in women with early-stage breast cancer, is now widely covered by health insurance, and another test for colorectal cancer is due out early in 2010. GHDX just reported a strong quarter, and there’s an analyst meeting on Thursday, Nov. 12. Cramer recommended waiting to hear more from that meeting before rushing to buy the stock.
Hi Jim!: My sister showed me the "booyah light" and I think you are doing a great job educating investors. In addition, I liked the cancer research spotlight as I am in remission for cancer. I was diagnosed in November of 2002 with a low-end cancer and I have my last Radioiodine treatment the first week of December! I have always wondered what stocks I could follow that have a bearing on my condition, so thank you. --Jim in New York
Cramer says: “I hope that everything goes well, sir … we are going to revisit all of these companies as we get closer to that hematology conference [on Dec. 5]. It’s just too compelling and cogent for many of you out there.”
Jim: My question for you is about Berkshire Hathaway . In the past, because of the high price for a single share, this is not a stock that many could ever consider owning. However, due to the upcoming 50-for-1 split, is it now a stock that can be considered? Thank you for all you do. --David in Florida
Cramer says: “I think that Berkshire Hathaway is still a great investment ... and I think that you should buy this stock and put it away.”
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