Cramer made a great call on Viacom back when it was at $39, and he still has his eye on cable. This time, though, Discovery is the pick. People want cable properties, he says, and DISCA is one that can be bought or sold – or broken up into pieces and sold.
Cramer says two great things stand out about the company: consolidation wiz David Zaslav, formerly of NBC, and the properties, which viewers can watch over and over and never get bored of – “Shark Week,” anyone? Zaslav has been hard at work cutting out all of Discovery’s money-losing ventures, including a consumer education initiative and its chain of retail stores. Now, the focus is on proprietary programming that stays “on brand.” And it seems to be working: Ratings have been surging since the beginning of the year.
Discovery is also a play on digital cable and high-definition TV. As Cramer says, no one cares about seeing Rosie O’Donnell in high-def, but it’s pretty cool to watch a pride of lions tear an antelope to shreds.
With Discovery shredding unprofitable divisions, ratings trending upwards, new rerunable programming being created and digital and high-def cable growing, Cramer thinks the company might even make a decent takeover target. So if strong fundamentals are reason enough to buy, maybe that could entice you.
Bottom Line: Viacom made Home Gamers some money, but Cramer's not done with cable. This time around, he's going with DISCA.
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