Cramer on His Brush with Morgan Products

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You like

Morgan Products

? Save your money and go buy a door from them. But the stock? Caveat emptor.

Yeah, I know the $10 Store's been hot. Making a lot of people a lot of money. And I know that Jesse Eisinger is a heck of a good reporter, one that the big dogs wish they had never let get away. Guy knows biotech five ways to Sunday. Never bet against him.

But purchase

Morgan Products? Not with my money.

About a half-dozen years ago I wrote these guys up for

SmartMoney

. That was before the journalistic press decided I was a war criminal for writing up small-cap stocks. I loved these guys. We had bought one of their doors at the co-op I just sold in Brooklyn Heights, the company was in the midst of a turnaround, courtesy of a new group of talented managers, costs were being taken out and the shareholder was going to come first. And my wife, the

Trading Goddess

, loved, loved, loved the saucer bottom that Morgan's chart was forming. Or the u bottom. Or the double u bottom. Or whatever those crazy chartists call something that looks like an upside-down bent line.

The price at the time? You guessed it: $6.

Unbelievable. The

Dow

has doubled and here I am reading in the $10 Store about these jokers and the stock is actually below where I owned it. Two points below where I sold it a few years ago. And, get this, the company has disappointed more times than I have fingers in that period.

Now, let's look at what has happened during the interim. We have had the greatest sustained run in housing starts in the history of the nation. The affluent segment of the economy -- where Morgan sold into -- has gotten bigger and bigger. Other housing product companies, from

Masco

to

Home Depot

, have doubled, tripled, quadupled, even.

But not these guys. They're lower than where I left them. There are only two times you ever hear of these guys: when they miss their quarters and when they appear on the biggest-percentage-decliner list!!!

Of course it is true that this time, as I like to say, things could be different. This time maybe Morgan will get it right. With rates looking like they are headed lower, anything is possible. Nevertheless, when I read through Jesse's story I see the same guy at the helm who made me buy more of the stock in 1994. He's still running this company, even though nothing has gone right in the interim, even though housing has boomed, even though his competitors have prospered.

Oh sure, one thing has changed. The only thing that made me like Morgan Products to begin with -- their excellent doors -- aren't made by them anymore. Now they are a "distribution" company. What's that mean? You mean they supply to other guys from other guys? Last time I looked that is the precisely the kind of business that is being squeezed.

So, be my guest. Knock on Morgan's door. I just wish I had some to sell to you.

James J. Cramer is manager of a hedge fund and co-chairman of TheStreet.com. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Mr. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he welcomes your feedback, emailed to

Jjc@thestreet.com.