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( SMDI) could be a smart way to play
Sirius Satellite Radio's
growth without having to pay for Howard Stern's huge salary, Jim Cramer told viewers of his "Mad Money" TV show Wednesday.
Sirenza makes hardware that Sirius uses; and as a derivative play on Sirius, what's good for the satellite radio company is good for Sirenza, he said. But what's bad for Sirius may not necessarily hurt Sirenza.
Sirenza just reported earnings that were in line given the fact that it upped its guidance last month, he said, adding that the stock is trading flat.
Sirenza designs and sells radio frequency components that go into several products that are part of the Cramer tech rally. But the products Cramer cares about are the ones that are sold to Sirius, which amount to 15% of Sirenza's sales.
Specifically, Sirenza makes part of the antennae for the Sportster, Sirius' top-selling product.
If Sirius' subscriber numbers grow from 3 million to 10 million as Cramer thinks they might, that means stupendous growth for Sirenza.
Cramer reminded viewers that this is a derivative play, so there are some less-than-great elements that can be overlooked. For example, he said, the company is not as diversified as he would like it to be because it has only a few key customers.
But, he said, at the end of the day the company's revenue comes from Sirius.
The company also has plans to release new synthesizer modules for WiMax, which Cramer thinks of as a technology of the future that could someday be huge.
A caller wanted to know if there was a similar derivative play for
XM Satellite Radio
( XMSR). He said that
would be the play but that he isn't as concerned about XM as he is with Sirius because XM doesn't have the same high programming costs.
So Cramer said that the best way to play XM is to buy XM.
Where There's a Willbros...
Infrastructure is on fire right now, Cramer said, pointing to the most recent quarterly earnings from
But with the sector already doing so well, where should investors go?
He said that anyone providing engineering and construction for the oil patch will make a lot of money, adding that's why names like
( SGR) made gains.
"The easiest money probably has already been made," he said, "so it's time to get a little more creative."
Cramer said that the best of the overlooked infrastructure plays is
"if you want something waiting to pop like a coiled spring."
It's trading well below where it was a year ago, but he said that there are some negative reasons why the stock became so cheap.
Class action lawsuits were filed by shareholders accusing the company of overstating earnings, filing false tax returns and saying that company officers had bribed officials, Cramer said.
Last quarter, the company lost money on legal fees and shelled out $30 million to deal with what it called "community disturbances" in Nigeria, he added. While Cramer wasn't sure what those disturbances entail, he said that such a euphemism rarely bodes well.
Given all these negatives, he said that there are still some reasons to buy. For starters, the company tossed out the people accused of bribing officials, and it has cleaned up its finances to a point where he could call them "orderly."
The company has also just brought on the former CEO of
Kellogg Brown & Root
, which Cramer called the best engineering and construction company on earth and which happens to be nestled within
, a stock he owns for his
ActionAlertsPLUS charitable trust.
"This guy is good, and if he worked at KBR he must know how to deal with controversy," Cramer said of Randy Harlin, who will now serve as chief operating officer of Willbros.
Plus, he said that the numbers are looking better, too, with the company's order backlog swelling.
A viewer wanted to know what Cramer thought about
. He said that the company is levered to alternative energy, and that as oil comes down, the sector could weaken a bit.
He said he would wait for a couple of days and to try get Suncor at $68, but that he would rather see the viewer in an infrastructure company.
More India Inroads
Cramer -- who on
Tuesday's show featured
-- offered another way to make some mad money in India, but it means buying
The Indian retail market is about to change, said Cramer, thanks to legislation passed this week in that country.
Up until now the country has been a haven of state socialism, with only 4% of retailers modern branch stores and the rest of the industry made up of mom-and-pop stores, he said.
However, the change isn't necessarily going to benefit the world's biggest retailers because foreign players will be permitted to establish only single-brand stores, Cramer said. And names like
sell a lot more than one brand, he said.
This is why, said Cramer, an Indian company willing to invest in retail, as Reliance recently said it will, could make some money.
The new law makes it difficult for foreign department stores to enter the country, he said, so Reliance's biggest competition will come from all mom-and-pop stores, creating a relatively competition-free environment for the company.
Reaching into the "Mad Money" mailbag, Cramer answered a reader who wanted to know if
run-in with the Justice Department will hurt its stock in the long run.
Cramer said that he still thinks the stock will hit $500 on its way to $600, but that there could be some mindless selling after it reports for the quarter. He told the viewer that he would take a little off the table before the earnings report if he was worried.
As for investors who want to "pimp stocks all over the world," Cramer said that he is not worried that the dollar will strengthen too much.
Cramer was bullish on
International Game Technology
Distributed Energy Systems
Cramer was bearish on
Progressive Gaming International
For more of Cramer's insights during the Lightning Round,
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At the time of publication, Cramer was long Altria, Foster Wheeler, Halliburton, TD Ameritrade and Occidental Petroleum.
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