Mad Mail: Is Linear Tech a Buy?
Last last week two viewers stumped Cramer with stock questions. Tonight, he has done the homework and is ready to do some housekeeping.
Jack in Washington, D.C. last Wednesday asked Cramer about Analogic. This is a company that makes signal and imagining processing systems, mainly for medical imaging, but it also has some exciting security applications, one of Cramer’s big themes for 2010. In the end, though, Cramer said Analogic’s earnings are too dependent on hospital equipment spending, and the stock just ran up after the failed Christmas airplane bomber attack. So he thinks investors should pass on buying ALOG.
Neutral Tandem also tripped up Cramer. Phil in New York asked about this difficult-to-understand company, which Cramer recommended back in October at $22.64 but has dropped $16.69. “I was wrong,” the Mad Money host admitted. He likes the business model, allowing phone companies to send traffic to other carriers more efficiently and cost effectively, but the stock has been overshadowed by concerns about competitors taking share. Just today the company said that its fourth-quarter results will be in line, and the Street sees results that merely meet expectations as a disappointment. Cramer’s bottom line is that the stock may look cheap, but the competition problem isn’t going away. Therefore, investors should “sell this one into any strength if we ever get it.”
Dear Jim: I've been buying Nisource since the dividend was 11%. I've made some mad money and the dividend is now down to 6%, so I sold a little as not to be a pig. My question: Since NI is a utility stock, will it continue to rise as the natural-gas explosion takes off? Thanks for all your help. I never miss a show. -Randy in Ohio
Cramer Says: “The dividend didn’t go down, the yield went down. The dividend has been consistently good at Nisource. But the stock went all the way down and gave you an accidentally high yield, and now its come back up…”
Jim: What are your thoughts on Linear Technology as a tech play on the wireless Internet tsunami? It pays a nice dividend and has raised its payout. LLTC’s profit margins are higher than many of its peers on rising revenues, and the company has a diversified customer base. Is this a good play? -Mike in Marietta, Ga.
Cramer Says: “…LLTC, that is a great tsunami play… Is it as good as Apple?No, but it certainly should’ve been considered just like SeagateTechnology , which reported monster numbers after the close, or Cree up $9 today.”
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