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Did you miss last night's "Mad Money" on CNBC? If so, here are Jim Cramer's top takeaways.
The wave of consolidation in the semiconductor space is far from over, Cramer told viewers, as he donned his investment banking matchmaker hat to predict the next perfect marriage in the space. He said that the $21 billion maker of memory chips known as Micron Technology would see huge positives from acquiring Advanced Micro Devices, makers of processors and high-end graphics chips.
After being in the doldrums last year, as PC sales slumped, this year shares of both companies have recovered, with Micron up 50% for the year and AMD roaring up 280%.
In the semiconductor world, diversification is king, Cramer explained, and diversification has been the driver behind just about all of the megamergers we've seen so far. In a market that tends to be boom or bust, diversifying offers protection and steady growth.
Micron is still largely a commodity maker of memory chips, Cramer noted, thus the acquisition of the faster-growing and proprietary chips of AMD would be a big win for both companies. Micron currently has $4.5 billion in cash, making a $10 billion deal with AMD a definite possibility.
Read more about which companies Cramer thinks will be the 10 Top Takeout Candidates of 2017.
Action Alerts PLUS: Cramer and Jack Mohr are trimming Occidental (OXY) - Get Report and recommending their investment club members buy Adobe (ADBE) - Get Report . Find out why with a free subscription.
Cramer said that GTT helps businesses connect directly to the cloud by bypassing the temperamental Internet you use in favor of its own secure and reliable network. GTT is one of only a few global Tier 1 networks that can provide such access.
Unlike other carriers, GTT leases most of its infrastructure, which means it spends less than 3% of earnings on capital expenditures. Additionally, most of the company's revenues are recurring and subscription-based, which makes them predictable and reliable.
Shares of GTT trade at a lofty 97 times earnings when compared to, say, 13 times for Verizon. But Cramer said that when you factor in the company's 25% growth rate, investors are paying less than 25 times earnings in the out years for a fantastic company.
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At the time of publication, Cramer's Action Alerts PLUS had positions in OXY and ADBE.