Skip to main content

Editor's Note: This was sent to subscribers of Action Alerts PLUS on Jan. 28 at 10:30 a.m. EST. Cramer holds Cendant in his Action Alerts PLUS portfolio.

There are reports out today that



may end up selling its Wright Express business rather than going ahead with the planned carve-out IPO. Should the private-equity bidders be lining up as the reports say they are, I believe Cendant ultimately will get a better price for its transportation fleet management business than the stock market would give it.

I'm not interested in owning a Wright Express spinoff, and as a Cendant shareholder, I'd like to see management choose the path that nets the most value for the division.

As far as Cendant's stock, I think it has 5 points of upside potential in the first half of 2005, compared with a point or two to the downside. I think the shares have been in a narrow range over the past couple of months, because the company is working on so many deals.

Cendant is set to close on some acquisitions and divest Wright Express in the coming weeks, at which time I believe folks will start looking at the stock once again. And what they'll see is a company that generates solid cash flow, pays a dividend and trades for an attractive 16 times expected 2005 earnings.

With that in mind, I'm going to buy 1,000 shares of Cendant here at $22.92. This will give me a total of 6,000 shares, or 3.8% of my overall portfolio.

P.S. One of the keys to successful investing is a smart portfolio strategy. So you might want to consider a

FREE TRIAL to Action Alerts PLUS

, where I trade my own $3 million portfolio and advise you on my every move


I act.

At the time of publication, James J. Cramer was long Cendant.

Cramer is a director and co-founder of He contributes daily market commentary for's sites and serves as an adviser to the company's CEO. Outside contributing columnists for and, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made.

To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS by

clicking here. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column to Listen to Cramer's RealMoney Radio show on your computer; just click



here to buy Cramer's latest book, "You Got Screwed!" Click

here to order Cramer's autobiography, "Confessions of a Street Addict."