China's Advertising Revolution
Focus Media owns the Chinese advertising market, Cramer said. The firm has been rolling up competitors through acquisitions that give Focus a virtual lock on the industry. Luckily for investors, China's view on monopoly is much more favorable than that of the U.S.
Yesterday, Focus announced it was buying CGEN, FMCN's main competitor in in-store digital advertising. Now, Focus will enjoy the luxury of CGEN's higher margins and the price control that comes with being the biggest player in the market. This and the purchase of Allyes, an internet advertising services company, earlier in the year has Cramer thinking that Google might want a piece of Focus to get a foothold in China.
The stock is down to about $55 from its high of about $66, interestingly enough because of the very reason Cramer likes it so much. Traders seem concerned about Focus' margins after all these acquisitions. "But the margins should improve dramatically next year as the deals are integrated," Cramer said.
There should be chances to get FMCN even cheaper in the near term as this intergration takes place. But even if the stock doesn't dip below $55, it's worth buying, he said, because FCMN could see $75 next year, especially with the 2008 Beijing Olympics just around the corner.
Questions for Cramer? email@example.com
Questions, comments, suggestions for the Mad Money website? firstname.lastname@example.org