April 3, 2006
"TOPP of the Heap!!"
"Something out of NOTHING!!!"
and the LIGHTNING ROUND!!!
A Recap of CNBC's 'Mad Money w/Jim Cramer'.
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o n i g h t ' s D i s c u s s i o n ' s
Vasco Data (VDSI),
Cytyc Corporation (CYTC)
Penn National Gaming Inc (PENN)
Procter & Gamble (PG)
Bed Bath & Beyond (BBBY)
Rite Aid (RAD)
Dow Chemical Company (DOW)
Nasdaq Stock Market (NDAQ)
Amylin Pharmaceuticals (AMLN)
Doral Financial Corp (DRL)
ViroPharma Inc (VPHM)
Benetton Group SPA (BNG)
"On Mad Money, we take ourselves to the ball game and buy Topps (TOPP)!
I'm telling you to take a look at topp because baseball season's starting.
I think you should view topp as an awesome value play. It's possible that baseball will indeed help topp. But only because so cheap, so undervalued that almost any catalyst could give it a bump.
Today, topp closed at $8.75. But I think it could easily see $10 or $11 if we get a good year from baseball card sales. With less than a dollar potential downside.
Hey, wait a second, that's 3 up, 1 down. That's the kind of risk/reward I love on mad money!
I'm recommending a value play here. Topp is my most valuable player.
Topp is a turnaround story, that hasn't really started to turn around yet. But I want you to be ahead of it.
This is a stock that could deliver a lot of upside by pulling itself together or, indeed, by selling itself.
Now, while you wait, I think it's a pretty safe bet. Because they've got $92 million in cash, and no debt at all. Remember, this is a $350 million co. With $92 million in cash? Hello!
This thing is dirt cheap... it looks like a bargain to me.
I still think they could sell their gum and candy business at a big premium. Perhaps to Tootsie Roll, or Hershey's, or Wrigley's, maybe Cadbury.
This is where valuation comes in my friends. Candy acquisitions have been happening at prices ranging from 2.4x to 3x trailing month sales.
Right now, TOPP's candy business is valued at well below twice 12 month trailing sales at the current price.
Let's noodle a little: if you were to value it at 2.4-3x trailing sales, like everybody else, and it's got a great brand name, then it would be worth the entire co. Right now. That's what makes this thing dirt cheap. Buy, buy, buy!
There's a lot of private equity money floating around, looking for value. And that's exactly what topp has.
Back in December, TOPP said it would buy back 12% of the co. They're doing a 'mon-back with their own stock. They're buying 5 million shares over the course of 10 quarters
Now, we know that some buybacks are completely meaningless. But this isn't one of them.
They're buying it back while it's cheap, and I think you should be doing the exact same thing!
Let me reiterate: TOPP could make you some mad money by selling the candy business, cutting costs, or having a good year for baseball cards.
The bottom line!: You want value? Then you want to think of TOPP!.”
"Something out of nothing"
"Cramer be stylin' - or, at least, I think he be stylin'...
I think you should buy a co. That does practically nothing! A company that really adds very little value to our economy - a company that really stands for as a testament to the wasteful inefficiency of capitalism.
This company I like may produce nothing of value, but it does make itself a lot of money! I think it could do the same thing for you!
The stock, my joe boxer friends, is Iconix (ICON)!
You might be more familiar with their brands: Joe Boxer, Candies, Bongo, Rampage. That's what is called a brand management co.
This company is in no danger of going belly up. None whatsoever.
I'm recommending this one today, because icon bought Mossimo and Mudd. Usually, when you get an acquisition, the acquiring stock goes down. But icon isn't your average co. The stock is rippin' today because the market approves.
The bottom line!: icon is one parasitic co. That should be able to make you some mad money. I think you should buy it but, remember, don't buy it after hours! And you must, must, must, must, must buy this stock using limit orders. If you don't use limit orders, you will never make money in the stock market, as Jim Cramer's Real Money: sane investing in an insane world, says over and over again."
"You read the headlines. You know that immigration into these great united states is the big issue right now.Home
Everybody else wants to tell you their opinion. They want to tell you why we should restrict immigration or we should open it up.
Hey, Cramer's an opinionated guy. I have often said when I want your opinion, I will give it to you. But, you know what? I know you don't care in mad money about Cramer's opinions.
You don't come to Cramer to figure out what to do with the border. You come to Cramer to figure out what to do with the money!
So, when immigration is splashing all over the headlines, you can think about that and debate it, or you can buy FDC!
These are the guys who own Western Union. They're spinning off Western Union in September or October and I think, when compared to the competition, this thing is very, very cheap! Buy, buy, buy!
Here's the play: immigrants, legal, illegal, semi-legal, whatever. They all send home remittances. That's why they come here, so they can wire dollars back home.
Last year, immigrants from Latin America and the Caribbean sent home about $40 billion. I know that western union, which made $1.3 billion last year, on $4 billion on revenue, is loving every penny of it!
Western union controls 15% of the world's remittances.
China and India are still small chunks of the business. No one complains about the Chinese or the Indian immigrants. But that portion of the business is growing at 60%.
Western union made up about 60% of fdc's profits. And 40% of their revenues last year. This is important for what I'm about to tell you.
I need to explain why I'm recommending FDC, right here, right now.
It isn't just about remittances. FDC's got an atm processing business, a check verification business, and a credit card business too!
You need to be looking at FDC because it's too cheap right now versus the compares, the other guys. And it's taking steps to correct that missed pricing.
FDC is giving wall street exactly what it wants by spinning off western union.
So let me tell you where I think this stock goes post-spinoff. Moneygram (MGI) trades at 21x 2007 earnings. Global payments (GPN) trades at 31x 2007 earnings. That's a big range compared to western union.
Western union deserves a GPN multiple. FDC's combined operating margins are 22%. That's the same as GPN, and MGI only has 16% operating margins.
Again, I'm trying to show you the way Cramer arrives at what he likes.
Western union looks a lot more like GPN, so it deserves that 31x multiple. That means western union, once it gets spun off, should trade at $41 a share.
It trades today at $47. I'm saying the western union business alone - alone - is worth $41.
The rest of the co. - the 40% of its earnings that don't come from western union - it's being valued at $6? That don't make any sense. It's trading at only 5x 2007 estimates. That don't make any sense.
That, my friends, colleagues and partners, is way too cheap. Like 'back up the truck' cheap.
After western union gets spun off, FDC should still be the dominant player in both its merchant services, and its card businesses.
It deserves to be worth more than $6-7 bucks!
Now, prudential did a sum of the parts analysis of the split, and their midpoint - $55 for the combined businesses of FDC - they're being too conservative; they only value western union at $30 a share.
That's not factoring in the kind of premium that western union should probably trade at. Nor do I think that's a good comparison to GPN or to MGI.
As I said, compared to the competition, I'm placing western union's worth at $41.
Now, S.G. Cowan, soon to come public, has a sum of the parts price of $60 for FDC. More accurate, but even that, I think, could be low. Let the horse race begin.
The bottom line!: even though the low-ball valuation for FDC from PRU is a 15% premium from where FDC trades now, I think the thing could have a 25% - maybe 30% upside. That's why I need you to check out FDC!