Cramer: Weakness May Be Rare Buying Opportunity
By: Sometimes a pullback is a caution sign. And other times it's an opportunity. In this case, Jim Cramer thinks it's the latter.
"Sometimes you need to wait for a stock to stumble in order to get a chance to buy it at a decent price," Cramer said.
And the Mad Money host thinks that may be the case with AFC Enterprises (TICKER: AFCE) the parent company of Popeyes.
Lately, AFC has been on a huge run. It's the best performing restaurant chain over the last 12 months, up some 89%, and it's rallied about 15% since the beginning of the year.
However, investors ran for cover this week after the company reported what was seen as a disappointing quarter.
What happened?
"AFC preannounced back in January, and although results were broadly consistent with that preannouncement, AFC's store growth for the quarter came in at the low end of expectations," Cramer explained. "Also, the company gave disappointing guidance for 2013."
Although developments are negative, Cramer isn't sure they warranted a 5% decline. Yet that's how the stock closed on Thursday - down 5% in one day.
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"I've been a fan of AFC Enterprises for some time now because this company has been turning itself around," he said. "If you still believe in the turnaround story, then you have to view this weakness as a rare buying opportunity," he said. "Typically you don't get a stock like this at a discount."
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