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Investing can be confusing. Luckily, Cramer has mapped out some road rules for all you Home Gamers trying to navigate the jungle that is Wall Street. Think of it as "Mad Money 101" –- some fundamental advice to keep in mind as you play the market. Whether you're a first time investor or a seasoned financier, it's always good to remember the basics.
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Feb.15
7:02 PM ET
Friday, 15 Feb 2008
Cramer: Stanley's No Good Short Term

Cramer may have 2,000 stocks in his head, but there are plenty of names that slip under his radar. Just last week, in fact, a caller stumped the Mad Money host with Stanley, a government contractor that does systems-integration work. But a shrug and an “I don’t know” would never do. So Cramer did his homework and gave Homegamers the call during Friday’s show.

Operating in two main businesses, Stanley [SXE  Loading...      ()   ] processes passports for the government and is in the business of protecting the U.S. from cyberspace attacks. There’s some revenue from government information-technology infrastructure, too, Cramer said, but the bulk of Stanley’s profits come from the former two.

A 2004 law that requires Americans to carry passports when traveling to Canada, Mexico, Bermuda or the Caribbean has gone straight to Stanley’s bottom line. And management predicts it can organically grow the company at 10% to 15% over the next few years. But that’s not enough for Cramer to call SXE a buy.

Stanley, he said, may be a decent investment over the long term, but for the near term Cramer wouldn’t touch it. SXE dropped 11% after disappointing analysts last quarter, and there’s potential for the stock to sink even lower. Stanley trades at a premium to the government IT sector, but doesn’t deserve to, Cramer said. So a dipping to peer level will hurt the share price more. And that’s not even taking into account the passport and other contracts Stanley hasn’t locked up yet.

The bottom line: This stock’s a "don’t buy," Cramer said.




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