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Cramer: Old Fashioned Turnaround Story

"In an uncertain environment such as this, few things are better than a company with an honest to goodness turnaround story," said Cramer.

MGM Resorts (TICKER: MGM) appears to be one such story.

Like any good saga the first part is a little sad.

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"Not along ago, MGM was a real sick customer," said the Mad Money host on Friday's broadcast. "It had taken on a ton of debt back when the economy was still roaring and Las Vegas was still a great place to do business."

If there was one place that the Great Recession took a hefty toll – it was Las Vegas. Gaming revenues in the city of sin tumbled by about 15% per year from 2007 through 2009.

"And Vegas represented about 80% of MGM's revenues. So when the Vegas market got annihilated during the Great Recession, MGM was crushed," said Cramer

"The big problem with Vegas during and after the recession was the huge amount of overbuilding. From 2007 through 2010, despite the slowdown, the number of rooms on the Vegas Strip increased by 15%. There was too much supply and not enough demand, and that's lethal for pricing," said Cramer.


Eric Van Den Brulle | The Image Bank | Getty Images

Now onto the second part of the story – the part that's much happier.

"Overbuilding is now a thing of the past," explained Cramer. "There are no new major resorts on the horizon in Vegas for the next few years. That's very good news for MGM, which operates almost a third of all rooms on the Strip. And at MGM specifically, the trends are looking much better. Forward convention bookings, a big part of the business, are up year over year.

"Meanwhile, they've upgraded the rooms at the MGM Grand and the Bellagio, two of the company's prime properties, and they're coming out with new entertainment and dining offerings—always essential in the competitive Vegas market," he added.

Also Cramer says MGM is doing a slew of things right.
- MGM's is selling selling 427 condos at its CIty Center property for $119 million.
- MGM has improved its balance sheet
- MGM just announced $4.8 billion in refinancing. "This is a huge deal, as the lower interest expense will provide a nice boost to earnings," said Cramer. Read More: MGM Resorts International Prices $4.0 Billion Senior Secured Credit Facility As Part Of Comprehensive Refinancing
- MGM owns 51% of its Chinese subsidiary, MGM China. Right now, they're one of only six companies that's allows to operate casinos in Macau.

Although Cramer concedes that traffic isn't back to where it was before the recession, its definitely improving. "And I think the improvement will be even more dramatic in 2013, especially if we get a deal on the fiscal cliff."

All told Cramer thinks this story should have a happy ending.

"However, the stock has popped off of its lows, so I think you wait for pullback before you pull the trigger," he said. But get ready to make your move. "There's nothing better than a good old fashioned turnaround story and MGM appears ready to play the part."

Read More: Scaling the Abyss - 9 'Buys' if Nation Falls Off Fiscal Cliff

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

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