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Visiting the Lows With Cabela's

As this stock makes a new 52-week low, Cramer chooses to make a trade based on what he sees coming next.
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Editor's Note: This was sent to subscribers of Action Alerts PLUS on May 13 at 11:42 a.m. EDT.

Cabela's

(CAB)

hit another fresh 52-week low this morning, and I'm going to pick at the stock with a purchase of 300 shares after you read this.

At $18.59 a share, the retailer is 20% below my cost basis and trades for less than 15 times expected 2006 earnings. Cabela's remains on track to open four new megastores this year, and I believe it can take market share in the growing but fragmented outdoor sporting goods market. With that in mind, I believe Cabela's can recover into the low $20s by the end of the summer.

This purchase will round up my stake to 9,000 shares, or about 4.6% of the total portfolio.

At the time of publication, Cramer was long Cabela's.

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James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, 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

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