On Friday's edition, Jim recommends West Pharmaceutical Services (WST) and cites Exubera, the new inhalable insulin, as the catalyst. Nektar Therapeutics (NKTR) has outsourced the manufacturing of the inhaler to West Pharma making it a less risky way to play the Exubera hype. WST has passed total cost increases on to customers, beat Q1 estimates handily and guided up. He still thinks it's cheap at 17 times forward earnings on 27% growth. Next, Jim suggests HealthSpring (HS), a co that takes care of private Medicare for states and runs it like an HMO. This will be lucrative space, given the fact that over the next 10 years Medicare spending should grow at a compound rate of more than 9%, said Cramer. This doesn't include the new drug plan, he added. They're adding new members at a rapid pace and he believes that there is a lot of room for it to grow new members. He also praises their its medical loss ratio of under 79%, a rate that would make competitors envious. Finally, he recommends Telkom Indonesia (TLK) and reasons that the Indonesian economy is improving based on the demand for its commodities including coal, oil and gold. The co has 71% gross margins, is a semi-government monopoly and is highly levered to the growth of the co, Cramer said. Phone lines and the Internet are what you invest in when your underdeveloped country starts to grow up, he said.
