When investors think of mobile Internet, Cramer’s latest favorite growth trend, the obvious names come to mind: Apple , Research in Motion , Qualcomm . But there are lesser-known and more speculative trades that could generate better returns. For investors who can stomach the risk, the payoff may be worth it.
Tellabs falls into this category. The telco-equipment maker fetches just about $6 a share, but it’s at the center of what looks to be a massive bandwidth build-out, as smartphones grow more and more essential to our lives and Web video grows in popularity. The stock is up a healthy 45% since Cramer’s Dec. 12 recommendation, but he’s predicting that there’s still “some room to run.”
It was Tellabs second quarter, announced last week, that tipped him off. Cramer has been trumpeting the rise of mobile Internet for some time now, but better-than-expected earnings and the best orders the company had reported in a year put this stock in special company. And just in case this thesis doesn’t work out as anticipated, the company holds about $3.12 of cash and equivalents per share and no debt. That’s a “nice cushion,” Cramer said, if something goes wrong.
Tellabs has enjoyed a significant run, though, even compared to other popular tech stocks. So Cramer invited CEO Robert Pullen onto Mad Money to make sure TLAB was still worth buying. Watch the video for the full interview.
Cramer’s charitable trust owns Qualcomm.
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