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News Roundup

Several recent news items could affect holdings in the portfolio -- let's run them down one by one.
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This morning, Medco (MHS) announced the acquisition of privately held United Biosource Corporation for $730 million in an all-cash transaction. UBC develops technology used in clinical trials and patient monitoring and is expected to post $280 million in 2010 revenues with annual sales growth of 20%. The transaction makes sense from a financial point of view -- it should be 1%-2% accretive to 2011 estimates -- and from a strategic basis: Combining Medco's global specialty pharmaceutical business with UBC's post-approval drug and device research will extend Medco's core capabilities in data analytics and research. With the passage of national health care reform, transparency of timely, accurate data is now more important than ever -- especially while not compromising quality and the ability to reduce costs -- and this transaction today does just that, on a global scale. I applaud the decisions taken by management in recent weeks to expand the company's verticals and become a stronger company.

Separately, evidence continues to support the stronger underlying fundamentals at the banks, with JPMorgan's (JPM) monthly credit losses falling in July to 7.95% vs. the 8.38% in June. Also, delinquencies of more than 30 days improved as well at 4.06% vs. 4.13% in June. Bank of America (BAC) also posted improving card metrics, with defaults net of recoveries at 11.39% vs. 11.98% in June and overall delinquencies falling 5.92% vs. 6.16% month over month. The stocks remain cheap and the balance sheets are improving monthly. I think sentiment is far too negative on this group and I'll stick with my holdings.

Finally, this morning Dell (DELL) acquired 3Par (PAR) for $1.15 billion in an effort to increase its exposure in storage. This move comes on the heels of last month's buy of Ocarina Networks and its 2008 acquisition of EqualLogic. Storage is one of the fastest areas in technology today, which is why one of my biggest positions in the portfolio is EMC (EMC) , the industry leader. EMC shares fell 5% last week after Cisco's (CSCO) guidance spooked technology investors; given the correction, it is now back on my radar screen to add if the stock falls below $18.

Regards,

Jim Cramer

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DISCLOSURE: At the time of publication, Cramer was long BAC, CSCO, EMC, JPM and MHS.