Cramer Backs Up the Truck on Smith & Nephew (SNN)

July 9, 2008 11:22 AM EDT

On last night's Mad Money, Jim Cramer told investors to pull the trigger on shares of Smith & Nephew (NYSE: SNN), a healthcare company that focuses on orthopedic reconstruction, trauma, and endoscopy.

Cramer believes that healthcare is "the safest and most consistent group in a market with high energy prices..." Within the sector, Cramer calls Smith & Nephew his favorite, despite a recent drop in its stock price. After reporting soft Q1 earnings on May 1, shares of Smith & Nephew are down about 15%; Cramer believes investors are now getting a gift as he calls Smith & Nephew "a great stock at a much too low price."

The CNBC host believes the worst is behind the company, and notes that its recent earnings slip up was the result of a recent acquisition which created about $100 million in additional sales costs in addition to about $10 million of investigations costs that were unexpected. Cramer believes the market overreacted to the earnings announcement and recommends investors pick up shares on this weakness.

The Cramer Effect is very much intact this morning: the pundits tout caused shares of Smith & Nephew to gap about 3.5% higher from yesterday's closing price of just under $53.

Smith & Nephew plc, together with its subsidiaries, engages in the development, manufacture, and marketing of medical devices to medical and surgical service providers worldwide.

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