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Spring is here and Jim Cramer told "Mad Money" viewers Friday that he has a stock that's ready to bloom.
It's time to buy
, he said, even though it sounds like the kind of bad dot-com that would have been a "house of pain" six or seven years ago.
But he said that the stock is ready to break out because it's the "anti-Amazon.com," meaning that "unlike
, this company makes massive amounts of money on the Web."
It's a multi-part story, he said, and the first is that the company has a smart model.
It's a one-stop shopping place for all of your gift, candy and floral needs, and half of their orders originate on the Web, he said. Plus, the company has a database with over 20 million customers.
There are some traditional gender stereotypes at work here, Cramer added, referring to the fact that a lot of men need a way to say "I'm sorry," but they don't have a clue what to do. They think flowers might be good, and candy would be good too, so he said that 1-800 Flowers gives them a way to buy all of their apology goods in one spot.
The company has expanded via smart acquisitions, he said, including candy company Fanny May Confections for $80 million.
Thanks to a major court decision, you can also pick up wine along with the chocolate and the flowers to really be forgiven, he said.
Up until now, a lot of states had restrictions on shipping wine across state lines. But the Supreme Court said it's time to do away with these fees, Cramer said.
He believes that these wine sales will be good for growth, and that analysts haven't factored in this new development and subsequent revenue stream.
Best of all, Cramer said, the stock is cheap. It trades at 20 times forward earnings, but has 18.8% earnings growth. That prices it at barely more than one times growth, he said, which is very inexpensive. The stock has been depressed for a couple of years and he believes that now we will see accelerated revenue growth and a higher stock price.
He told a caller that Valentine's Day is the only holiday that really causes the stock to jump, and that we've missed that pop.
Internet gaming plays are on fire, Cramer said, pointing out the fact that British and offshore plays that trade in London, including
, which trades under the ticker PRTY,
, which trades under SPBTF, and 888 Holdings, with a ticker symbol of 888, are all moving higher on that exchange.
So what's the "pin action on these successful companies? He said it's
, the company that makes the Internet security software that all these companies use.
Safety matters in online gambling, because it's all about financial transactions, he said. The gaming operators are having a huge year, but all they really do is run the proprietary games and software of Cryptologic.
The company consistently beats estimates and it's buying back stock like crazy, he added
Cramer said the company is not just a buy for the security systems and for the growth of online gambling. It's also a great buy because Cryptologic has perfected "UPOD... perhaps the most important acronym on Wall Street."
UPOD stands for under promise and over deliver, he said, referring to the fact that the company has beaten its midpoint guidance for the last 10 quarters.
Wall Street loves companies that give conservative guidance and then greatly exceed it, Cramer said. And he believes that the stock will spike after it gives its next round of better-than-expected results.
Dull is Good
One of the greatest ways to make money is to find good stocks that have become scorned, Cramer said. "They're out of the rotation...they don't fit into the sexiness of today's market."
That's why he likes
, a "dull" company with tried and true consumer products. Consumer products companies like Chattem have good solid growth no matter how the economy is doing because people always buy items like shampoo, toothpaste and deodorant.
These high-quality defensive plays aren't sexy enough to grab the attention of people who want a piece of the current commodities blow-up, now that "everybody and their mother wants steel stocks," Cramer said.
But once these hot sectors fall apart, these steady growers will do very well, he said. In fact, Cramer owns one of these plays,
Procter & Gamble
, for his charitable trust
So, why Chattem and why now? He said it's important to pick up these steady growers when everyone rotates out of them because you'll miss the boat if you wait for them to come back into fashion.
You never know when the rotation will end, he added.
He said that in terms of pricing, he likes Chattem better than P&G, even though he believes Procter is a better company.
And because Chattem so small, he said that the stock can move big when the sector rotation finally happens.
Of course, a company won't come back into favor, rotation or no, if the business is bad, he said. But Chattem makes well-known products like Icy Hot and Aspercreme.
The company is also introducing many new products that he believes will do well, particularly because the company is beefing up its ad campaigns.
is selling some of its consumer product lines. While rumor has it that
has the inside track, Chattem could get some of these lines, too, he said.
He also said that the company's earnings have been solid, and that Wall Street estimates for the current quarter are conservative.
Earlier in the week, Cramer had been stumped by
, so he invited the company's chief executive, John McDonald, to explain what the company does.
McDonald said Perficient is the fastest growing e-business consulting company around, that it survived the tech crash and has grown from a start-up to a company with $125 million in revenue.
He also said it has plans to grow its business to $500 million in five years.
For large companies like
, McDonald said that Perficient finds ways for them to use the Internet to increase efficiency.
Cramer said it sounds good, but that he would do more homework on the stock before he made a move.
To view Cramer's interview with McDonald, please click here.
Cramer was bullish on
GOL Linhas Aereas Inteligentes
Weight Watcher's International
Cramer was bearish on:
Research In Motion
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At the time of publication, Cramer was long Procter & Gamble.
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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