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"Thank goodness it's speculation Friday," Jim Cramer told viewers of his "Mad Money" TV show, because then he could recommend
"This $4 billion company, the No. 1 supplier of digital maps used in navigation systems, location-based services and geographic information systems, has been acting like deal bait," he said.
In fact, "Navteq is now rumored to be an acquisition target for
," said Cramer, which already uses Navteq for its Google Maps.
Cramer said he's talked about this pattern before with iron company
. First comes the rumor that a company is an acquisition target. On that rumor, the stock spikes and people start buying call options. This has already happened with Navteq, he said.
"The third step is, in this dance, someone makes a bid for Navteq," he said. The stock is already a lot higher on rumors, but a "consistent trend in this market has been for the takeover to happen with a nice premium anyway," Cramer said.
And even in those rare instances when there's no takeover, "the stock usually doesn't fall," he added.
In this case, Navteq is a "great play, because Google has already said that it wants the company," Cramer said. "And what Google wants, Google gets."
According to Cramer, "me-too
is another potential purchaser of Navteq.
"Microsoft recognizes that it's barely treading water on the Web. Google's mopped the floor with all the competition, and it's the Internet company, with Microsoft a distant runner-up," he said.
The two companies have been in a bidding war before, over
. Microsoft lost and ending up spending "a fortune" on
Microsoft's great new plan, Cramer said, is to "just try to acquire whatever Google's acquiring." He's expecting Mister Softee to make a pre-emptive bid for Navteq "because they're great at being ... followers."
"Speculating on a takeover of Navteq doesn't seem like much of a risk," said Cramer, who said he would never recommend a stock on a takeover speculation alone; the fundamentals have to also be good.
In Navteq's case, it's part of a "happy duopoly," with one main competitor: Tele Atlas. "The best reason to be part of a duopoly is that you get to keep prices high."
"Takeovers aside, Navteq is the big winner from the increased demand for in-car navigation," Cramer said. In addition, a low-cost navigation system is coming out in the second half of the year, "increasing Navteq's penetration and sending its stock higher."
Right now, Navteq is riding higher on takeover rumors of an acquisition. "I think it goes even higher on an actual takeover," Cramer said.
The Next Akamai
"You want a great momentum name? A top-notch steaming, steaming-hot IPO?" Cramer asked. "Look no further than
, which comes public next week and will be trading under the ticker LLNW."
The company provides content-delivery network services, which means it helps deliver high-bandwidth online content, like YouTube or Cramer's formerly bullish pick,
As for Akamai, after its two-year run as the premier play on this content delivery, Cramer feels it "is at last tapped out. It's just flat-lining."
But when Limelight comes public, it will be billed as the next Akamai, he said, "and that's going to get everyone on the Street really excited."
Cramer cautioned viewers that it's important to understand the hype without buying into it. "Limelight will probably not be the next Akamai. It will probably not perform as well as Akamai has," he said. But that doesn't mean it won't go a lot higher anyway.
"Fundamentally, the picture does look great for Limelight," said Cramer, adding that rich media content is one of the few Internet areas where there is still a lot of growth.
Cramer said that Limelight being sued by Akamai and MTV is "an unknown quantity still, but it could do some damage."
"The real reason to buy this stock, however, isn't the fundamentals. It's the hype," Cramer said. "We've gotta play it the way it makes money ... and the next Akamai should make people a lot of money even if it's not the next Akamai."
But Cramer doesn't want investors to stick around for long. "You just need to remember to take a little profit rather than stay on, in the vain hope that this stock really is the second coming of Akamai," he said.
The initial price range for limelight is $10 to $12, which he said was "very cheap." He'd be willing to pay up to $17.
Cramer said that if Limelight gets to the level of Akamai's sales multiple, $23.49, that's where he would sell.
He reminded viewers that he's not backing away from
Level 3 Communications
with this pick. "I like it more than ever."
"This whole show is about speculation," he said, "and I'm speculating on Limelight."
In response to his first caller, Cramer said that
has also been rumored to be a takeover target. Trimble's OK, Cramer said, "but it's a little bit second-rate vs.
Another caller asked if private equity was going to take out the whole GPS group. Cramer said he doesn't think "private equity wants to be in this area as much as Microsoft and Google" do.
Next week is conference week, Cramer said, and he's looking forward to some good ones.
Best of all is the ASCO (American Society of Clinical Oncology) conference this week, where some "serious good news" is expected from
on its upcoming liver-cancer data. Cramer expects the data to push Onyx even higher. Then, he said, "I think Onyx will be hard-pressed to stay independent." The briefing is on Tuesday, so "Monday is Onyx day."
An even bigger buzz at ASCO, at least for the hedge funds, is
. A recent note, out last night, from Third Point Capital contains charges of preferential behavior by the CEO.
"I think the board listens, and the CEO's out next week or maybe the week after," Cramer said. And that will give PDL BioPharma another 5 points of upside.
On June 6 is
meeting. "This meeting will no doubt highlight Warren Buffett's love for them," as well as hedge-fund pressure on railroads to juice up their stocks.
"The Norfolk Southern guys are cautious," Cramer said, and he believes that a worthy trade might be to buy ahead and then sell into the meeting.
On Tuesday, Merrill Lynch has an agricultural conference focusing on fertilizer and seed. "It's hard to believe that the ag stocks could go any higher, but anything's possible in a bull market," Cramer said. His favorite fertilizer plays are
Chemical & Mining Co. of Chile
June 7 is
Johnson & Johnson
Day. People are expecting good news, but Cramer isn't. JNJ is his "least favorite pharma company because it has so much competition and so many drugs coming off patent." If the stock lifts at all, Cramer says, that's a good opportunity to sell.
Next, Cramer said it was time for a little soul searching about his
pick, which he owns for his charitable trust,
Action Alerts PLUS.
No matter how many winners he's picked, NYX has become the albatross around his neck, Cramer says. "The stock is truly hated." He said that if people have no faith in him or his judgment, they should sell NYX.
Cramer believes in the stock and that it's eventually going higher.
"If you think I'm wrong on New York Stock Exchange Euronext, put your money where your mouth is," Cramer said.
A Real Wild Child
Buffalo Wild Wings
President and CEO Sally Smith to the show and thanked her "for making so many of our viewers so much money."
Cramer called Buffalo Wild Wings' conference call one of the best of the quarter. One topic of discussion was the June 25 opening of Buffalo Wild Wing's Ohio State store. "It's two touchdown passes from the stadium. It's two levels and will seat 350 people," Smith told Cramer.
Cramer wanted to know why, when Buffalo Wild Wings spots seem so popular on college campuses, it seems there are many more campuses that don't have locations than do.
"As we go in and build out markets, undoubtedly we will be locating by those college campuses," said Smith. "They make some of our best fans."
To view Cramer's interview with Sally Smith, please click here.
Cramer was bullish on
Portfolio Recovery Associates
Companhia Vale Do Rio Doce
Cramer was bearish on
For more of Cramer's insights during the Lightning Round, click here
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At the time of publication, Cramer was long Goldman Sachs, NYSE and Freeport-McMoRan.
Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."
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