"The new tech complex, that's all I can think about," Jim Cramer told his
"RealMoney" radio show listeners on Wednesday.
Advanced Micro Devices
butt," Cramer said both of those companies are still part of the old tech complex.
And listeners need to be levered to the new complex, because that's where the bull market in tech is, he said.
The new complex is all about the new broadband and Internet facilitators, said Cramer. The bull market is in devices that, for example, link PCs to cell phones, he said.
He also responded to a viewer of Wednesday's episode of his
television show who asked why JDS Uniphase is going up despite the fact that it's doing a 1-for-10 reverse split. Cramer said it's because the company is a legitimate turnaround/diversification story and that it could become one of the biggest test and measurement businesses.
He also said that he's been bullish on Conexant because it "simply has the right products for the broadband explosion."
"You have to understand that when you see all of these new gadgets being reviewed, they've got a lot of Conexant stuff in them," he added.
Cramer reassured listeners not to "sweat this stuff" because these stocks go down in unison.
When Intel went down, it weighed on all the techs, he said, calling this an opportunity to buy.
And perhaps next week if
disappoints, there will be another buying opportunity.
Cramer on Demand
The company that listeners wanted to know more about for the "Cramer on Demand" segment was
On April 20, the stock hit a low of $22, when people were worried about the comps, Cramer said, and now, at $31.50, it's at just a point off its 52-week high. While he's usually reluctant to recommend stocks at this level, he thinks Starbucks is worth it.
This is because the company is moving into China in a big way, he said, and that it hopes to see as much as 20% of its business in China over the next couple of years.
"When that happens, the stock will be just red hot," Cramer said.
"Take a look at how
, which operates KFC, moved a couple of years ago when it moved to China," he said. "The stock doubled."
He also said that the company is selling CDs like mad, posted earnings growth of 20% and is working on a project with the Oprah Book Club.
But with that earnings growth of 20%, he's ideally willing to buy when the stock's price-to-earnings ratio is double that growth rate, or a P/E of 40. But right now the P/E is at 48, so he said that he'd like to see a pullback before buying.
For investors who want the stock now, he recommended putting half the position on the table because buying all at once means committing the sin of arrogance.
If you want 500 shares, buy 250 now and wait for it to come in, he said.
Break it Down
Will Gabrielski of TheStreet.com's
Stocks Under $10, joined Cramer to discuss his new newsletter,
In this publication, Gabrielski weeds through the clutter of small- and mid-cap stocks to find potentially winning stocks before the crowd does.
He said that even with great companies like
, there's nothing there to make these big names go higher anymore. But in the small-cap space you can take advantage of the fact that Wall Street doesn't care about many of these names yet.
Of the three stocks he recommended today, he told listeners to pay attention to
Instead of looking at it is a semiconductor company, Gabrielski said that he's looking at it as a derivative play on solar power because it owns a large share in
Its semiconductor business has a horrible reputation, so the stock has never performed well, he said. But he sees upside in the solar power business. And he has even heard some talk that its semiconductor business is not as bad as it was two years ago.
Cramer asked him why a company mentioned in the Stocks Under $10 newsletter,
, is ramping up so high.
Gabrielski said it's because Allscripts made an acquisition of A4 that should be a positive move and that it has clarified its relationship with GE. While this doesn't extend their relationship forever, it helps clear up some recent uncertainty.
Thursday is "Stump Cramer" day, when listeners get to find out just how much the stock guru knows. Cramer warned listeners not to run out and buy a stock that stumps him just because a caller makes it sound good, but to wait for a member of TheStreet.com's Stocks Under $10 team to go on the show tomorrow with an analysis of the stock.
He was stumped by
Top Image Systems
, a small Israeli company that markets information recognition systems; and by
, a specialty chemicals company based in Las Vegas.
But thanks to a girl on his daughter's field hockey team, he already knew about
, which trades in Canada.
He said that the company is interesting, but that his history of buying gold and mining stocks in Canada is limited.
Instead, he said, he'd take a look at
Birch Mountain Resources
Penn Treaty American
a good long-term care insurer, saying that it's profitable but doesn't grow overly much.
He knew about
from the Stocks Under $10 newsletter, which has been recommending the private network security company.
But Cramer said to be careful because the CEO just filed to sell 10 million shares.
A caller wanted to know why Wall Street wasn't unanimously bullish on
given the company's blowout numbers and increased outlook.
Cramer said that UnitedHealth, which he owns for his charitable trust
Action Alerts PLUS, is a great company and the fact that people are selling means an opportunity to buy the stock.
It's the nation's largest health care provider, a major insurer and a company involved in health security issues and drug-monitoring, he said.
Cramer told a caller who owns
that now might be a good time to ring the register a little and go for a company in the new tech pantheon, like Broadcom or JDS Uniphase.
And he told a caller who owns options in
, another company Cramer owns for Action Alerts Plus, that he would think about taking half off the table.
This is because no one ever got hurt taking a profit, and because with the stock up $1.50 in two days, Cramer said those gains could be taken away.
At the time of publication, Cramer was long Intel, Motorola, Qualcomm and UnitedHealth.
James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for
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