This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Cramer's 'Mad Money' Recap: Finding Opportunity in a Declining Stock

Five Below is by no means an inexpensive stock, noted Cramer, as it now trades for 50 times earnings with a 35% growth rate. But the company does have a proven concept and only 226 locations with the opportunity to expand to over 2,000.

Cramer said by comparison, Dollar General (DG) has 10,000 stores, while Dollar Tree (DLTR) has 4,300. Using the current valuations for those stocks, Five Below should be worth $4 billion to $5 billion, whereas its current market cap is less than $2 billion.

Cramer cautioned investors not to chase shares of Five Below higher, as the stock has exhibited the peculiar pattern of falling sharply when it reports earnings. He said that as with many momentum stocks, there will be plenty of opportunities to pick up shares on the cheap later on.

Executive Decision

In the "Executive Decision" segment, Cramer spoke with Patrick Doyle, president and CEO of Domino's Pizza (DPZ), a stock that's come under fire recently as shares have seemingly stalled, up just 4% for the year.

Doyle said Domino's remains an international growth story as the company is now slightly bigger outside the U.S. than it is inside the U.S. He said Domino's will be celebrating its 10,000th location in Istanbul, Turkey, later this week, making it only the eighth restaurant chain in the world to achieve that milestone.

Doyle said restaurants need to have an international story in order to thrive in today's market, and Domino's has a proven that their concept works and they have a lot of room to grow. He noted that Domino's only has 100 locations in India, a country with over one billion people, and those locations continue to grow in the double digits.

Other hot spots for Domino's include Turkey, where the company has 250 stores, and France, a country, Doyle noted, that "eats a lot more pizza than people think." He noted that Domino's continues to represent a good value, which helps it thrive even in weaker economies.

Doyle closed by saying Domino's is always looking for ways to reward shareholders through additional dividends and stock buybacks. Cramer said while the stock may be stalled, Domino's is still a great story.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,265.99 +109.14 0.64%
S&P 500 2,011.36 +9.79 0.49%
NASDAQ 4,593.4250 +31.2360 0.68%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs