Sexy Tech Stock
For "Speculation Friday," Cramer declared
to be the most unexpectedly sexy tech stock out there. He said after consolidation in its industry, Netgear is now in a happy duopoly with
, and its Linksys brand, in the home-networking arena.
Netgear currently commands 30% market share in the home-networking space, and is making money hand over fist as consumers upgrade to the faster new wireless-N standard, said Cramer. The company is also branching out into new products like media players and IPTV products that stream Internet content to HDTVs.
Netgear is also expanding beyond the consumer market, said Cramer, and into the small- and medium-size business arena as well as striking deals with cable providers to become the default cable modem of choice with millions of households.
Netgear executives expect the company to double revenue over the next five years, and is on track to do so after delivering a six-cent-a-share earnings beat on revenue up 35% year over year when it last reported. Cramer said Netgear trades at only 13 times earnings, and only 10 times earnings when backing out the company's cash on hand. Netgear currently has an 18% long-term growth rate.
"Never dig in your heels when it comes to a stock," Cramer told viewers, as he once again changed course on
, one of the nation's largest pharmacy chains.
Cramer said he used to like Walgreens, but after cut-throat competition caused the company to deliver a four-cent-a-share earnings miss on Jun 22, Cramer went bearish.
So what's changed? Cramer said Walgreens has gotten its act together and just recently reported a five-cent-a-share earnings beat on a 7.4% rise in revenues and better same store sales. In addition, the company reported a 5.3% uptick in sales for September.
Cramer said the turn in Walgreens is for real. Management has stopped putting up new stores, which take three to four years to break even, and is instead focusing on making its existing stores more profitable. Walgreens' specialty pharmacy business is also improving by drastically cutting costs.
Walgreens currently trades at just 13 times earnings, while the company historically sells at 16 times earnings. Cramer said that makes the stock a buy, despite its huge run-up over the past month.