Cramer's Mad Money - Nice Systems, Nice Stock (10/13/09)

by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Tuesday October 13.

Nice Systems (NASDAQ:NICE)

Cramer thinks security is going to be the next secular trend, and he discussed "best of breed" Israeli security company Nice Systems. The company focuses on surveillance, and analyzes suspicious communications via cameras, e-mail and radio to protect city centers, bridges, train stations and other public areas.

Nice's specialties are Internet Protocol-based video surveillance and money laundering detection systems. The market has grown 13% in the past year and should increase to $3.75 billion from $2.6 billion year over year. Nice has made several acquisitions, has plenty of cash and trades at a multiple of 17 compared to a 17% growth rate. Cramer doesn't think the stock is expensive, but would wait for a pullback before buying.

Off the Charts: Under Armour (NYSE:UA), Deckers Outdoor (NASDAQ:DECK), Nike (NYSE:NKE)

Looking at the charts of apparel companies Under Armour and Deckers, Cramer thinks both stocks look like buys. Their move beyond the 200 day average on high volume shows an interest in buying and the consolidation on low volume signals a willingness to hold on to the stocks. In spite of this "very bullish" technical pattern, the fundamentals tell a different story.

Under Armour has been having difficulty with its footwear division and the fact that new shoe brands arrive on the shelves heavily discounted is a "major, major warning sign." In addition. Nike and Champion are taking market share from Under Armour. Decker's UGG shoe brand, on the other hand, has received an endorsement from Oprah, and comprises 70% of Deckers' revenue. Deckers has been successful in marketing UGG shoes to target customers with its high-end product and specialty shoes. "I think Deckers has room to run," said Cramer.

Deckers trades at 10 times 2011 earnings while Under Armour trades at 26. Even with Under Armour's higher growth rate, Deckers is cheaper, and has only risen 7% while Under Armour has already made a 23% move. Cramer decided Deckers is a buy and Under Armour is a sell; "If you want a sports apparel company, go buy Nike."

The Next Starent (STAR-OLD), Juniper (NYSE:JNPR), Ciena (NASDAQ:CIEN), Tekelec (NASDAQ:TKLC)

Cisco's acquisition of telco-equipment supplier Starent will definitely benefit both companies, and Juniper will be desperate to play catch-up. Cramer thinks there may be two possible takeover targets for Juniper: Ciena and Tekelec. Both have “some of the best assets out there for the mobile Internet." Tekelec's text messaging technology and Ciena's bandwidth solutions would make either company a major asset. In addition, the fact that The Street has ignored both stocks makes Cramer interested in Ciena and Tekelec.

Two-Time Wall of Shamer Fortress Investment Group CEO Wes Eden

The resignation of CIT Group (NYSE:CIT) CEO Jeffrey Peek has created a new space on Cramer's Wall of Shame, and Peek's replacement will be Wes Edens, who is the first Wall of Shamer to be awarded the dubious honor twice. This time, Edens is to blame for the "total disaster" of RailAmerica's IPO, of which Fortress took half the proceeds. This action could “kill the whole IPO market." Cramer bid Wed Edens a warm welcome back to the Wall of Shame.


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