Sexy Tech Stock
For "Speculation Friday," Cramer declared Netgear (NTGR) 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 Cisco (CSCO), 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.
Turnaround Story"Never dig in your heels when it comes to a stock," Cramer told viewers, as he once again changed course on Walgreens (WAG), 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.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV