JJC:   On this show in Cramerica, we like companies that can reinvent themselves!... At least as long as there's something worthwhile to reinvent...

...and that's exactly what I think Bristol-Myers Squibb Co. (BMY) looks like right now...

Do you know, I've hated this stock, ever since I started this show... I mean, despised it...

I'm changing right here... BMY looks like it's breaking itself up, to become a pure play drug company... buy, buy, buy!... and, when that happens, it should become one of the cheapest drug companies out there... one that I would definitely consider buying...

Here's the story...

On Friday, BMY sold its wound care business, Convatech, for $4.1 billion. Step one... People yawned. The stock was down today... Sorry... that's stupid...

Step two is the partial spinoff of Mead Johnson, BMY's nutritionals... I want you to think baby formula business (e.g., the Enfamil brand)...

Right now, the plan is to sell 10-20% of the nutritionals business in an IPO... It should bring in $940 million to $1.9 billion. I think it's going to be on the high side; this is going to be a very hot IPO.

Now, there have been rumors that BMY wants to sell the whole division... There's a lot of opposition to this from investors, because of the cash flow it brings in and because of the taxes...

BMY would take an outright sale, I believe... People don't want it. I do.

People won't be yawning when it happens...

You see, this IPO is seen as a compromise. BMY keeps to keep Mead Johnson, as a cash cow, even as it establishes an independent evaluation for that part of the company, and gets the flexibility to sell off the whole thing, later on down the line. I personally wouldn't be a bit surprised to see a cash bid for this division from our friends, Heinz (HNZ)... which I believe would love to have it... But I think the IPO will most likely place a very high valuation on Mead Johnson, and that would boost all of BMY...

The money from Convatech - the sale on Friday - and the Mead Johnson IPO should give BMY the money it needs to buy up smaller pharmaceutical companies... build a better pipeline... diversify out of its portfolio risk...

So what's BMY look like, as a pure play on drugs?...

Well, in three years, drugs representing half of BMY's profits, including Plavix, will go off patent...

You can look at this two ways...

It looks like BMY has three years of great earnings visibility left for these drugs, or BMY has three years to get its act together, before things get really bad.

I see these two moves, the selling of Convatech and the IPO of Mead Johnson, as steps BMY is taking to avert a catastrophic situation in 2011, where BMY's biggest drugs go generic.

BMY can use the money from these sales to buy up smaller drug companies, and round out its drug portfolio to replace what it's losing. Oh, and the Mead Johnson spinoff... In two years, they'll have to sell it entirely... good tax consequences. That could provide BMY with a ton of money right before the patent expirations...

Now, BMY does have other drugs, that are new ones, that should help pick up the slack... In other words, 2011 isn't the end of the world... it isn't the beginning of the collapse of a great American drug company...

For example, Reyataz, an HIV drug, already brought in around $1.1 billion a year for BMY, and it isn't due to lose market exclusivity until 2017... BMY's got Sprycel, which is a chronic myeloid leukemia drug, that some analysts think could become a billon dollar drug blockbuster... a 2013 expiration...

BMY has Ixempra, a drug for advanced breast cancer tumors... $800 million mark by 2012... Then there's Orencia... this is one that I've been following closely, because I have friends who have this... a rhumetoid arthritis drug that could reach $1 billion in sales by 2012, making it another potential blockbuster... that one, I think, is understated...

BMY's got a hepatitis drug, Baraclude, that could hit $700 million, within the next three years... These are all real drugs... How about the diabetes II drugs they've got... Saxagliptin... in the pipeline... phase III data coming out in June... I think you want to be in, ahead of that data... It could be a $500-600 million drug by 2012...

You see all these drugs by 2012 they have?... The "no pipeline" rap?... I think it's unjustified, in light of that lineup...

To put it this way... and it's even better than the fact that some think they have no pipeline...

Nobody believes anything BMY says... Any sweet upside... anything that does work is going to be immediately impactful, and make you money.

Now, tomorrow, BMY is going to have its annual meeting, and I think all of this is going to come out... The strategy to deal with its big drugs going generic... It's attempts to become more of a pure play drug maker... And I also think BMY will highlight the pipeline...

It's really much, much better than people think... Yeah! BMY is trying to reinvent itself!...

In addition to what I've already told you, it's been slashing costs. I mean, really getting rid of a lot of people there... BMY's got $1.5 in savings by 2012...

And, of course, there's BMY's bountiful 5.4% yield... I regard that as mouth watering... 11.4x forward earnings... I mean, it's ridiculous... It's got 11.4% long-term growth rate...

Big dividend... good growth rate... I think this is a stock... This is a stock that could either go up soon at the meeting tomorrow... if it is bullish, and I think it will be... or go up later. Hey, you know what?... If it takes longer, that's fine with me! BMY's paying you to wait, with that mighty dividend... much better than treasuries!...