Cramer’s Dialysis Plays – Fresenius & DaVita

Cramer told investors that dialysis plays Fesenius (FMS) and DaVita (DVA) are in a great position to benefit from this year’s Medicare spending bill. He pointed out that the current version of the bill provides dialysis companies with annual base-rate and inflation-rate payment increases. Cramer explained that FMS and DVA control 65% of the U.S. dialysis market. He said he prefers FMS because it has solid overseas exposure and its the best-of-breed stock in the sector. He also likes FMS for its growth into emerging markets like China, which is growing at 30% to 40%. The stock trades at 17 times earnings and sports a 11% long-term growth rate. Cramer thinks FMS can hit $65 and will earn $3.26 a share, vs. Wall Street estimates of $3.10 for 2009. Join the fastest growing community of small cap investors at Stockhideout.com

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