My Three Favorite Speculative Plays

It's time to spell out the names that have a chance to work well for this portion of your portfolio.
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Might as well spell out the speculative gems here. As I write in

Jim Cramer's Real Money: Sane Investing in an Insane World

, I think that speculation, for at least a portion of your "Mad Money" portfolio, not only can be done, it

should

be done.

But I think that it has to be done on a limited basis and with something that has a real shot at working out. I have been dancing around the names that I think have a chance, but it's time to spell them out now.

My three faves right now are

Qwest

(Q)

,

Level 3

(LVLT)

and

Arena Pharmaceuticals

(ARNA) - Get Report

. Let me explain why these can work and work big here.

First, Qwest is turning around so fast that I think people don't even realize how strong the numbers are. The broadband revolution finally has hit the old-fashioned telcos with a vengeance. We saw the same thing with the

BellSouth

(BLS)

and

AT&T

(T) - Get Report

quarters, and Qwest is gaining share and growing again. I don't think anyone realizes how much cash these companies can throw off.

Meanwhile, while lots of people want to play the growth of the Internet through an

F5 Networks

(FFIV) - Get Report

or an

Akamai

(AKAM) - Get Report

-- both very worthy choices -- I think the best way to play it is with Level 3. It's growing as fast as many of these companies when it comes to the Internet, at least, but it needs to fix its capital structure. It will, and the stock could double in 18 months when it does.

Finally, I like Arena Pharma because it has not one but two drugs in formulation, one for diabetes and one for obesity. It cut its revenue forecast this week and freaked everyone out. That's an opportunity. I don't like it because of its revenue, I like it for the approval of the drugs.

I think that these are among the best speculative plays out there and I thought that rather than just haphazardly mentioning them every other week on

radio, I should just spell them out here.

Random musings:

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At the time of publication, Cramer had no positions in any of the stocks mentioned.

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