NEW YORK (TheStreet) -- Stocks are bouncing back Wednesday, including a 17% boost in Western Digital (WDC) - Get Report thanks to Unisplendour, a Chinese company, taking a large stake in the company, TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, said on CNBC's "Mad Dash" segment.
Unisplendour is paying $92.50 per share for a 15% stake in Western Digital, a significant premium to the current stock price of $80. However, despite today's move higher, the stock is still down 27% on the year.
Western Digital has good cash flow but investors are tossing these types of companies out when they don't have earnings growth, Cramer explained. But when stocks are down big in a tough market, there are investors willing to step in as buyers.
Not all these investors are hedge funds and activists -- some come in the form of other companies too, he reminded viewers. That's why Western Digital's competitor Seagate Technology (STX) - Get Report should be looking for a big buyer. Seagate stock, at around $44, is down close to 34% on the year.
At the time of publication, Cramer's Action Alerts PLUS had no position in companies mentioned.