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Cramer's 'Mad Money' Recap: Daktronics on Track

TheStreet.com Staff

Click here for an archive of Cramer's "Mad Money" recaps.

To play the boom in digital billboards, buy Daktronics (DAKT Quote), Jim Cramer told viewers of his "Mad Money" TV show Monday.

Although Cramer said he has pronounced old media dead, the oldest form of media -- billboards -- is "coming back with a vengeance." He believes outdoor ads should survive, whereas other old media probably will not.

Daktronics may be up significantly, but Cramer still considers it a buy. The company, he said, is not just limited to ads on highways, but is also taking part in the sports market as it has been successful at penetrating the high school and college football scoreboard business.

But it's not the football business that's putting it over the top, Cramer said. It's the company's outdoor digital billboards. "Daktronics owns this market," he said.

Cramer believes the digital billboard should be the second-fastest-growing type of media after Web-based advertising. Daktronics has accelerated its spending in this division, and "it's important to understand that it's up because of this," he said.

The company also makes electric highway signs, a division that has grown 65% and has "staggering numbers," Cramer said. As this part of Daktronics' business is very unpublicized, he believes it should create an upside surprise for the company.

Moreover, Cramer said Daktronics has "pricing flexibility" and has "made the 'Mad Money' scoreboard [on the show's set]."

Companies can no longer rely on print media to get their message out, Cramer told his viewers. They need to stick with online advertising, or "the next best solution," digital outdoor advertising, where market players should be able to make some mad money, he said.

Not only is Daktronics making money off of digital billboards, but the companies buying the billboards are raking in money as well, Cramer said.

People may no longer have to watch TV ads because of the digital video-recording system, and it may not be necessary for people to listen to the radio any more, "but nobody can ignore a billboard," Cramer said. "And if guys who own billboard places are smart, they'll digitize," so the ads can change.

Cramer believes Lamar (LAMR Quote) is a "fabulous acquisition target," which understands that it is more profitable and efficient to have digital signs.

As Lamar is on track to increase its billboard count and there are high barriers to enter this market, Cramer said Lamar should profit.

"The local, state and federal governments have decided CBS (CBS Quote), Clear Channel (CCO Quote) and Lamar should own 85% of this market," he said.

Moreover, as French company JC Decaux has allegedly expressed interest in buying Clear Channel, Cramer believes there should be a better company that wants to buy Lamar.

The bottom line is Lamar's headed higher, and he doesn't see much downside to owning it, he said. Plus, he wouldn't be surprised if it gets bought out.

"JC Decaux wants Clear Channel because of its billboard division, and Lamar is the pure play in this sector" and is "going digital faster than any other company," Cramer said.

Safeway and Sound

If you're looking for ancillary ways to play Christmas, Cramer said it's time to buy Safeway (SWY Quote).

He believes Safeway is the "single best unthought-of way to play Christmas" because it makes gift cards, which tend to have "big business" during the holiday season. Safeway owns gift-card maker Blackhawk, which is "probably worth $4 to $5 billion on its own, Cramer said.

Further, the fact that it is very hard to find financials on Blackhawk makes Cramer believe analysts might not even know about Safeway's Blackhawk business, which has a billion dollars in annual sales.

Blackhawk makes branded gift cards for stores like Barnes & Noble (BKS Quote), Apple's (AAPL Quote) iTunes, MasterCard (MA Quote), Nordstrom (JWN Quote), Home Depot (HD Quote) and Sears, (SHLD Quote), which he owns for his charitable trust, Action Alerts PLUS, to name a few, Cramer said.

Very few people actually know about this hidden part of Safeway, he said, "but as soon as the Street figures things out, the stock should go up."

He also mentioned Safeway's supermarket business is "great" and is "financially sound enough to add a half-billion dollars to its buyback program last Friday and offer a dividend."

Cramer advised viewers to get into the stock before its analyst meeting, scheduled to take place Tuesday. However, he warned people not to buy the stock after hours and suggested buying it Tuesday morning instead.

Blackhawk's business is "too good to ignore," and Safeway's supermarket business is getting better, so people should get in before Safeway's stock is upgraded, Cramer said.

Allergan Grinning

Cramer welcomed Allergan (AGN Quote) CEO David Pyott onto the show and asked him to talk about his company's medical pipeline.

Pyott said his company has an early-stage program for neuropathic pain, and also that 50% of the company is ophthalmology, a sector in which Allergan has been the fastest-growing company for the last four years.

"The great position we have is that Allergan is the largest company in the world in the medical aesthetics space," Pyott said. "If we look at the plastic surgeon customer channel, the three largest consumables are breast implants, Botox and dermal fillers, where we have Juviderm."

He went on to say that he considers Allergan the "best-positioned company in this industry to participate in a growing marketplace."

Pyott also said Allergan plans to do a head-to-head trial with Juviderm and Medicis'(MRX Quote) Restylane next year to find out which product people like better and which lasts longer.

To view Cramer's interview with Pyott, please click here.

Lightning Round

Cramer was bullish on Lockheed Martin (LMT Quote), L-3 Communications (LLL Quote), Northrop Grumman (NOC Quote), Boeing (BA Quote), NYSE (NYX Quote), DivX (DIVX Quote), Disney (DIS Quote), Coldwater Creek (CWTR Quote), Arris Group (ARRS Quote), BEA Systems (BEAS Quote), VeriSign (VRSN Quote), Phelps Dodge (PD Quote) and Verizon (VZ Quote).

Cramer was bearish on Brocade Communications (BRCD Quote), Panacos Pharmaceuticals (PANC Quote), Advanced Micro Devices (AMD Quote), Intel (INTC Quote), Sun Microsystems (SUNW Quote), Hansen Natural (HANS Quote) and New York Community Bancorp (NYB Quote).

For more of Cramer's insights during the Lightning Round, click here.

In his "Sudden Death" round, Cramer was bullish on Yamana Gold (AUY Quote), and he was bearish on Toro (TTC Quote).

Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by clicking here.