Cramer's 'Mad Money' Recap: Laser Revision
12/12/05 - 07:19 PM EST
TheStreet.com Staff
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Jim Cramer is switching horses in the cosmetic laser field, he told viewers of his "Mad Money" TV show Monday. Cramer said to take profits in former king Syneron Medical (ELOS Quote - Cramer on ELOS - Stock Picks) and ride the "newest, hottest laser company," best-of-breed Cynosure (CYNO Quote - Cramer on CYNO - Stock Picks). Cynosure began trading Friday, and its stock was up from its offering price. But it wasn't up too much, said Cramer. That's a bullish sign, he said, and he believes Cynosure's stock will have "five more days of goodness." Cramer likes Cynosure's cosmetic lasers because they are more cost effective than those of its competitors. Cynosure's lasers are modular, meaning one laser can be used for different applications by fitting it with a different module. Cynosure, like all laser companies, is speculative, though, said Cramer. However, the company has good revenue growth as revenue grew to $40.9 million for the first nine months of 2005 vs. $29.4 million for the same period in 2004. The company has also improved operating margin to 10.9% from 4.4% a year ago, and gross margin is 53.3%, expected to grow to 60% or more.
Be conservative when placing orders to buy Cyneron, said Cramer, and always use limit orders.
In response to a question about Ionatron (IOTN Quote - Cramer on IOTN - Stock Picks), Cramer said the military laser company hasn't had great revenue growth and is not profitable. So, he is not comfortable endorsing the stock.
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