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Thursday, October 03, 2013

Jim Cramer Says Celgene is Better Than Pfizer

According to Jim Cramer, Celgene is  better than Pfizer. Curious why?  Insider Monkey created a post for you with regards to "Jim Cramer Says Celgene is Better Than Pfizer". Jim Cramer is the host of the popular “Mad Money” show on CNBC. He is famous for making big bold calls, liking momentum stocks and preferring dividend yielding stocks. On his show November 16, Cramer discussed the importance of looking beyond company metrics, using Celgene (CELG) as an example.

CELG is a fast growing biotech company. Cramer used the company as an example to illustrate the importance of paying attention to a company’s metrics as well as its future prospects. Cramer compared CELG to Pfizer (PFE). He explained that PFE is selling at 8.6 times next year’s earnings while CELG is selling for 14.5 times its earnings, so PFE appears cheaper, but Cramer says you have to look deeper. In this case, PFE has a 4% dividend yield but lacks growth. "That's why when we're playing in pharmaceuticals, I'd prefer to go with a fast growing biotech firm like Celgene," Cramer said. "While Celgene has a higher multiple than Pfizer — selling for 14.5 times earnings — it also has a much higher growth rate, which is why this stock is the cheaper of the two." In fact, because of its high growth rate (25%), Cramer said that CELG could be the least expensive growth stock he is following right now. CELG closed Wednesday at $64.87 with a one-year growth estimate of $75.70. Bain Capital’s Brookside Capital is a fan of CELG.

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