But to frame this in some hard numbers, Cramer compared a Saks buyout to the deal that took Neiman Marcus private. It’s not a perfect match-up – Saks is in the middle of a turnaround, which means weaker margins – but Cramer adjusted the figures to get them as even as possible.
Based on sales, Saks would be worth $25.34 a share to a buyer, and based on earnings before interest, taxes, depreciation and amortization, the number jumps to $26.30. Cramer admits these numbers might be too optimistic, but he said that if it’s true that two buyers are waiting in the wings, then Saks should at least be able to fetch $23 a share. SKS is trading below $19 now.
Even on top of the buyout talk, Saks is a great turnaround story, Cramer said. The retailer reported a penny below estimates last quarter, but it had 13% same-store sales growth and its margins climbed 2.7%. As long as Sadove keeps delivering, and Cramer thinks he should, the stock is still worth owning.
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