Anyone who criticizes Cramer for his emphasis on speculation needn’t look any further than Ciena, which he first recommended on Dec. 12, 2008. Since then, the stock has returned 197%.
“I don’t even think Ciena’s finished,” Cramer said.
He doesn’t endorse all speculation all the time. But he sees no problem with 20% of your portfolio being in a riskier name in order to keep things interesting. Especially when that stock is tied to the biggest secular growth trend since the mass adoption of the Internet: the mobile Web. And Ciena , a telco-equipment maker that focuses on boosting data transmission speeds, is about as tied into that as you can get.
Ciena handles more than just mobile Web, though. This company operates in all things network, making it a big beneficiary of Apple’s iPad and similar bandwidth-hogging devices as well. But while any mention of Apple usually brings positive reaction from analysts, the Street has been anything but supportive of Ciena’s acquisition of Nortel’s optical-networking business.
After Ciena’s meeting with analysts on Tuesday, though, Cramer was quick to brush off the negativity. The company said the deal will make it the third-largest networking equipment player, with a 9% market share and 18 of the 25 biggest telecom providers as customers. Also, Ciena is targeting 10% to 12% revenue growth, and it expects to break even by the end of its fiscal 2010.
Still, there are concerns, specifically the amount of debt necessary to make this deal happen. How will Ciena pull it off? Watch Cramer’s interview with CEO Gary Smith to find out.
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