Homework: Cramer’s Research on Xylem, Private Bancorp.. & More
If you watch Mad Money regularly, you know that sometimes when a caller asks about a stock Jim Cramer tells them quite honestly he needs to do more work before he can form a thesis.
And he means it. Following is research and Cramer's resulting calls, sparked by viewer questions about stocks.
MICROS Systems (MCRS)
Kelly in Pennsylvania wanted to know about MICROS Systems, the world's leading developer of enterprise applications serving hotels, restaurants and specialty retailers.
"The company provides complete information management solutions by simplifying the cash register and linking it to the back office," explained Cramer.
"At first glance Micros looks fairly cheap, selling for 15 times next year's earnings with a 15% growth rate, but given that the company has $7 a share in cash, it's actually extremely cheap. Plus, we like the new CEO's strong computer services background. Now, the business seems to have stabilized, yet stock is down 11% for the year, which gives you a nice entry point."
However Cramer did add a caveat – if we go over the fiscal cliff this stock will likely trade lower with the rest of the market. If you're expecting no compromise by Jan 1st, "you can pick at MICROS on weakness."
Read More: Cramer's Plays on Housing Rebound
Raymond in Florida wanted to know more about Xylem, a pure play water company with products that are involved in the transportation, treatment and testing of water.
"It sells water and wastewater pumps along with filtration, disinfection and biological treatment equipment primarily for utilities," Cramer said. "The stock is only up 3% for the year, but there's a reason. Europe accounted for 37% of sales last year, so we're concerned the weakness over there will dampen any positive effects from Sandy. If you want to own Xylem, I think you have to wait for a major pullback down to $22, about four bucks below where it is right now (Friday Dec. 7th)."
Private Bancorp (PVTB)
Kenny in Illinois, asked about Private Bancorp, a regional bank that primarily operates in the Midwest.
"This stock has had a very good year, up 40% in 2012, thanks to improving credit quality and an exit from the bank's TARP overhang via an equity raise," said Cramer.
"But, I think the positives are clearly baked into the stock right here. This bank could do really well in an environment of rising interest rates, but the Fed is has made it clear that rates will stay low until at least 2015. So I say it's time to ring the register (take profits if you have them).."