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Cramer's 'Mad Money' Recap: Syneron Will Surge

TheStreet.com Staff

Jim Cramer discussed a stock on his "Mad Money" TV show Wednesday that has been out of the spotlight for in a long time -- Syneron Medical (ELOS Quote).

The cosmetic-laser company's stock hit the mid-$40s in December 2005 before pulling back.

Now it's back with a new story, he said. Cramer had previously told viewers to swap out of Syneron and into Palomar(PMTI Quote), a stock that Cramer previously thought of as "best of breed" in the laser space.

Syneron, which Cramer calls by its ticker name, ELOS, is down to $25.70. But Cramer believes that it will go much higher, as it has a cheap and major catalyst coming out next month. It could be big enough to turn the whole stock around, he said.

After ELOS reported two negative quarters, everyone on Wall Street stopped paying attention to it, but the two missed quarters were not related to the company's core business, Cramer said.

ELOS has an average of 30% revenue growth and is up 46% in operating margins.

This once-forgotten and abandoned stock has a new product in the pipeline: a dental laser. The company should have soaring earnings in growth and be worth more because of the dental exposure, said Cramer.

In addition, there are rumors that the company could be acquired.

After becoming a punching bag and bottoming, ELOS has passed through the worst and is "ready to run," said Cramer. It's under the radar and couldn't be cheaper, he said.

Don't Dive Into DivX

DivX makes software that compresses digital video and licenses it to companies. It has a deal with Google (GOOG Quote) and is moving into Eastern Europe and India.

The company makes the majority of its money by selling its product at a much higher price than it costs to make.

DivX is starting to get coverage by analysts and right now has four buys and one hold, giving it limited upgrade potential, Cramer said.

Moreover, the fact that its share-lockup doesn't expire until March 22 is good and bad, he said. It's good because there won't be an insider selloff until March, but it's bad because investors will be waiting for the selloff before they get into the stock.

What's more, there is a strong possibility of a secondary offering, which could crater the stock, he said.

Although it's been profitable for the past two years, that doesn't mean it deserves to go higher, Cramer said.

"I don't want you in DivX for the next few months," he said, adding that there's a good reason to be conservative. Cramer likes it a lot cheaper.

Am I Diversified?

In his "Am I Diversified?" segment, Cramer's first caller owned the following five stocks: SunTrust (STI Quote), BellSouth (BLS Quote), Yahoo! (YHOO Quote), NYSE (NYX Quote) and Toyota Motor (TM Quote).

Cramer said that although the portfolio is diversified, Yahoo!, which he owns for his charitable trust, Action Alerts PLUS, has been hurting him. He also owns Toyota and NYSE for his trust.

Cramer's next caller named the following five stocks: Apple (AAPL Quote), NYSE, Goldman Sachs (GS Quote), Crystallex (KRY Quote) and Transocean (RIG Quote).

Cramer said the caller's portfolio was not diversified, but called it "the best of the best." He owns Goldman Sachs and Transocean for his charitable trust, Action Alerts PLUS.

His last caller had the following five stocks: Google, Cisco, America Movil (AMX Quote), Homex Development (HXM Quote) and NYSE.

Cramer said the portfolio was not diversified because the caller had a tech pair with Google and Cisco, and a Latin America pair with America Movil and Homex Development.

In his "Sudden Death" round, Cramer was bullish on UnitedHealth (UNH Quote). He was bearish on Lam Research (LRCX Quote), Georgia Gulf (GGC Quote) and Coventry Health Care (CVH Quote).

In his "Mad Mail" segment, Cramer apologized for getting Trump Entertainment (TRMP Quote) wrong.

He said he thought the company would get the approval for a license to build a casino in Philadelphia. Cramer said people could hold the stock as an investment, but said he doesn't believe it will move until summer.

When a mailer inquired about Gap (GPS Quote), Cramer said he doesn't want to make a bet on it, but at the same time he doesn't want to bet against it. The stock has no leveraged buyout coming, he said.

Lightning Round

Cramer was bullish on Foster Wheeler (FWLT Quote), KBR (KBR Quote), Conceptus (CPTS Quote), Cisco (CSCO Quote), J.C. Penney (JCP Quote), Devon Energy (DVN Quote), Best Buy (BBY Quote) and Quest Diagnostics (DGX Quote).

Cramer was bearish on O2Micro International (OIIM Quote), SanDisk (SNDK Quote), Family Dollar (FDO Quote), Wal-Mart (WMT Quote), Dollar General(DG Quote), UAL (UAUA Quote), CPFL Energia (CPL Quote), Brightpoint (CELL Quote), Arena Resources (ARD Quote), Motorola (MOT Quote), Nokia (NOK Quote), Bio-Reference Laboratories (BRLI Quote) and Circuit City (CC Quote).

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

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