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Stealing Cypress From the Street

Periodically, there are such mistaken plays on Wall Street, such misvaluations, such steals, that you have to take advantage of them before the insiders do, Cramer says. Cypress Semiconductor could be that play.

Cypress owns $2.4 billion of Sunpower , a company that it created. It used to hold as much as $2.8 billion, but it sold about $400 million in an offering on May 1. The total market cap of Cypress is $3.2 billion, so if you subtract the $2.8 billion, you’re left with a powerhouse of a semi firm worth only $400 million. Cramer says that’s a heck of a deal for a company that’s estimating 2007 core semi sales of $803 million.

Cramer’s expecting accelerating growth in the second half of this year as a result of a wave of new products the firm is selling. Cypress has been lowering expenses, too, as well as divesting some unimportant businesses. He says this makes the company look like Freescale, just before Motorola spun it off and it got a private equity bid.

Cypress should pay the obligatory 20% premium to the currect price for Sumpower, Cramer says, and then split the company into two pieces. He thinks that with earnings jumping from Cypress’s new products and Sunpower as a standalone company, the value of both could be doubled.

Bottom Line: An anomaly that allows a profitable company that sells at 0.84 of core sales cannot last, Cramer says. Consider buying Cypress before Cypress buys itself. And CEO T.J. Rodgers: Cramer wants a cut of the banking fees if you do.

Questions? Comments? madmoney@cnbc.com

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