NEW YORK (TheStreet) -- If you believe that text messaging and the infrastructure needed to support the likes of Apple's (AAPL) - Get Report iPhone will continue to grow, the stock of a small telecom-equipment maker called Tekelec (TKLC) presents a good buying opportunity, according to Jim Cramer.
"Tekelec rocks," Cramer said during his "Mad Money" broadcast on
The company, based in Morrisville, N.C., near the Raleigh-Durham Research Triangle, makes the equipment necessary to transmit text messages and, perhaps even more lucratively, allow users to keep their phone numbers when switching carriers, a technology that's called local number portability.
Tekelec holds a 35% share of the local number portability market. Wireless providers like
need to buy local-number portability infrastructures in order to build out the mobile Internet for the growing smart-phone market.
Teklec's stock was crushed in early August after the company reported second-quarter earnings, and it hasn't yet fully recovered.
Cramer said that many investors who caught the run in Tekelec stock when it rose from about $11 to $19 have since booked their profits. He said this was a mistake, citing what he believes are the company's strong fundamentals.
In the second quarter, Tekelec beat expectations, earning $9.8 million, or 14 cents a share, but issued full-year guidance that seemed to disappoint investors slightly. Tekelec said it expects to earn 90 cents to 95 cents a share for the full year, while analysts were calling for 94 cents a share.
But the biggest catalyst for that August sell off was the news that India had delayed implementation of local number portability. It now expects to introduce the capability at the end of the year.
According to Cramer, however, the delay is nothing to worry about. India, he said, will likely become a huge market for Tekelec. Further, about 10 other countries are also expected to roll out number portability in the next two years, including Argentina, Brazil, Russia, Chile, Turkey and Thailand.
In September, Cramer called the stock an underperformer compared with other mobile-techology stocks.
Among the seven analysts covering Tekelec, its stock has two buy and five hold ratings.
Shares of the company have traded between $10.01 and $19.68 over the last 52 weeks. They're currently up 1.7% to $16.29 in late-morning trading Friday. Cramer said during Thursday's "Mad Money" program that the stock is really worth about $20 and could even reach $27.
-Reported by Jeanine Poggi in New York.
Follow TheStreet.com on
and become a fan on