We recently compiled a list of the 9 Stocks on Jim Cramer’s Radar. In this article, we are going to take a look at where Merck & Co., Inc. (NYSE:MRK) stands against the other stocks on Jim Cramer’s radar.
Jim Cramer, host of Mad Money, recently emphasized the importance of long-term investing, urging investors to focus on the growth prospects of certain pharmaceutical stocks while also answering callers’ questions about certain stocks. Cramer acknowledged that stocks often experience cyclical trends, with some sectors falling out of favor temporarily.
“Look, stocks go in and out of style in the Wall Street fashion show. Whole sectors wallow at times. Right now, healthcare’s in some sort of doghouse the likes of which I’ve never seen.”
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Despite the industry’s struggles, Cramer reflected on his observations at the JPMorgan healthcare conference in San Francisco, where he saw many pharmaceutical companies that he believes are not being properly valued by Wall Street. While the present outlook for these companies may not be particularly stellar, he highlighted the strong and lucrative long-term potential they offer.
“Why am I so willing to focus on the so-called out years? Because the long-term possibilities for these companies, frankly, they’re incredible and by the way, incredibly lucrative too, even as the present is good, but not great.”
He pointed to the ongoing progress in the healthcare sector, particularly with GLP-1 drugs, which have the potential to treat more conditions beyond diabetes and weight loss. Additionally, companies are working on developing oral versions of these treatments, which could offer patients more convenient options. Beyond GLP-1 drugs, healthcare companies are expanding their portfolios with new cancer therapies, treatments for eye care and asthma, and experimental drugs for COVID-19.
“The bottom line: Ask yourself what happens if things get better, please. What if the future is brighter than the past? If that’s the case, and I think it is, then you’ll have a lot of winners with these drug and medical device plays.”
Our Methodology
For this article, we compiled a list of 9 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on January 14. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close-up of a person’s hand holding a bottle of pharmaceuticals.
Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 86
Cramer commented on the global healthcare company, Merck & Co., Inc. (NYSE:MRK), as he said:
“How about Merck? Okay, now here’s a company with the single greatest anti-cancer franchise of all time. It’s called Keytruda, but I think it’s not getting enough credit for an acquisition it made in 2021, that was the purchase of Acceleron for $11.5 billion. With that acquisition, they got this drug called Winrevair. It is approved by the FDA, just this last year for an almost always fatal disease called pulmonary arterial hypertension.”
Cramer discussed Merck’s (NYSE:MRK) drug Winrevair, highlighting a statement from the company’s CEO, Rob Davis. According to Cramer, Davis, who has a non-promotional approach, described the drug as something that has “pulled people back from the brink of death.” Cramer also pointed out that Davis mentioned that people who used the drug are now ‘alive and may have to go back to work again’. In response to this, Cramer humorously remarked, “win some, lose some.” He went on to add:
“They (the company) also have a shot, Gardasil, that protects against HPV. It’s [a] very common STD, that can cause cervical cancer. It’s a true lifesaver. Women have been using it for years. [The] Chinese government recently approved it for men too. But for some reason, Merck’s having a problem with its Chinese distribution and women. Weird situation going on over there. Right now, the stock’s well-ensconced a few points around 52-week low.”
Cramer expressed that he does not believe Merck (NYSE:MRK) stock will remain at its current low level for long. However, he also acknowledged that he can’t predict exactly how long it will take for the stock to recover. Musing whether this meant investors should sell, Cramer responded, “Sure, if you’re a day trader, but not if you’re an investor.”
Overall MRK ranks 2nd on our list of the stocks on Jim Cramer’s radar. While we acknowledge the potential of MRK as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MRK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.