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What's in Storage?

"If you really want to understand why a stock trades the way it does, you need to know its history," Jim Cramer told "Mad Money" viewers Thursday.

"There's so much irrational sentiment that gets attached to a stock because of the way it treated people in the past," he said, and knowing the history and the feelings it has created will give you the edge.

Brocade Communications ( BRCD) is one stock so tainted by its history that that "it's difficult to even mention it to people," he said. But Cramer believes that now is the time to buy the network storage device maker.

The stock trades at a "nasty discount" to its peer group because people can't forget the fact that it slid from all-time highs near $160 to single digits, where the stock remains today, he said.

And last year the company had to restate three years of earnings because it had not accounted for options expenses, which Cramer said hurt everyone who was in the stock.

It trades at 21 times earnings vs. the 25 times earnings at which its peers trade, Cramer said; and it trades at twice sales vs. similar companies that trade at three times sales.

The bad history goes back a lot longer than a year ago, he said, and included massive internal problems with the Securities Exchange Commission.

But Cramer said the company is set to beat its quarterly earnings estimates because the network storage market is on fire after "four long years of bear market."

The company's products are also some of the best in the market, and even after performing so poorly in the past it is still the market leader in switches.

Cramer said that the new management team is finally trustworthy and the company could be a takeover target because the entire sector is consolidating.

We only speculate on takeovers when the company's fundaments are improving, he said. And he believes that such is the case with Brocade.

"If you pay up to $6, I think you're fine," Cramer says.

Crack Open Femsa

Never buy a bottler, Cramer has told viewers in the past. "But right now I'm changing my antibottling stance," he said.

But you have to "pimp to Mexico" to find a bottler that will make you money, and it's Fomento Económico Mexicano ( FMX), also known as Femsa.

The company is the world's No. 2 coke bottler and it's getting bigger, he said. "You have to go to the developing world to find soft drink markets that are not completely saturated," he said, and Coke has a huge market in Mexico.

When you buy Coke beverages, the company that bottles it will make the money, he said, adding that "Wall Street will pay anything for this kind of growth."

Femsa is also the second-largest brewer in Mexico and runs the largest chain of convenience stores in Latin America, which feature the company's beers.

The stock has jumped because Bear Stearns beat Cramer to the punch in its praise of the company, but he said Femsa is still a buy.

Price Choppers

Sometimes you get a stock that has its hand in multiple bull markets, Cramer said. For example, only one stock encompasses the bull markets in helicopters, private jets and tanks -- and that's Textron ( TXT).

When you think of the manufacturing renaissance, you need to think of Textron, he said.

The company's Bell Helicopter unit spent two decades doing nothing, but the helicopter business is now good for two reasons that are "rarely heard mentioned in the same sentence."

The first is oil drilling, Cramer said, because oil rigs are in the ocean and need to be accessed via helicopter. And the global war on terror is boosting the sector because helicopters are good at "eliminating bad guys," he said, adding that the army's main reconnaissance helicopter is being replaced by a Textron chopper.

The company's Cessna unit is the biggest maker of small and medium-size jets by market share, Cramer said. And he believes that increased use of private jets by corporate America will lift this business.

Plus, as people in "BRIC" countries -- Brazil, Russia, India and China -- become billionaires, Cramer said, the first thing they do is go out and buy a Cessna.

Finally, when you look at the bull market in the company's tank business, you only need to think about Iraq, he said.

The BRIC countries are just beginning to industrialize, and in doing so they're going to skip the landline phone generation and go straight to wireless, said Cramer.

The trend has created a wave of infrastructure spending "the likes of which I've never seen," he said.

That's why it's time to take a look at Powerwave Technologies ( PWAV), a wireless communications and contract manufacturing business.

CEO Ronald Buschur told Cramer that his company is positioned to provide the coverage, capacity and products that these countries need to roll out wireless networks.

Buschur also said there's a lot of room for trend to grow, estimating that in China alone only 10% to 15% of networks are actually built out, and that most are not 3G-capable.

Lightning Round

Bullish

Cramer was bullish on Chesapeake Energy ( CHK), Apple ( AAPL), LifeCell ( LIFC), Energy Transfer Partners ( ETP), Palm ( PALM), Avista ( AVA), Blackboard ( BBBB), Pain Therapeutics ( PTIE), Kulicke & Soffa Industries ( KLIC), Citrix Systems ( CTXS), Allied Waste ( AW), Ameritrade Holdings ( AMTD), Charles Schwab ( SCHW), E*Trade Financial ( ET), Peabody Energy ( BTU), Arena Pharmaceuticals ( ARNA), Smurfit-Stone ( SSCC)and Costco ( COST).

Bearish

Cramer was bearish on BioMarin Pharmaceutical ( BMRN), Gap ( GPS)and True Religion Apparel ( TRLG).

For more of Cramer's insights during the most recent Lightning Round, click here.


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At the time of publication, Cramer was long Ameritrade Holdings.

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."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, TheStreet.com or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor TheStreet.com, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in TheStreet.com, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.

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