With the Carlyle Group taking CommScope private, Cramer needs a new name for his Mad Money Mobile Internet Index. Who’s the lucky winner? Motricity. Here’s why.
The index, Cramer’s measure of the smartphone revolution, comprises four broad groups, namely the phone makers themselves, infrastructure and delivery, chipmakers and the software and content plays. So far the semiconductors have gained the most, adding an average of 56 percent, but Cramer thinks the most potential going forward will come from software and content.
Hence his pick of Motricity , whose mobile data platform powers the Web services of AT&T , Verizon , Sprint Nextel and T-Mobile. Basically, the company’s platform provides Internet access for users of what Cramer calls “dumb phones,” or those handsets that lack the browsers seen on smartphones. But MOTR also helps carriers manage Web traffic, optimize websites for small phone screens and capture online advertising dollars be aggregating information from social-networking sites and application stores for their subscribers.
Motricity controls 80 percent of its market and is growing steadily overseas. Still, after the 76-percent jump the stock’s seen just since Cramer first recommended it on Oct. 22, now is not the time to buy. After a move like that, he’s predicting MOTR heads lower before it again pushes higher. The play then is to wait for the share price to dip to between $24 and $25 before starting or adding to a position.
Some may fault Cramer for mentioning the stock at these lofty levels, but he said he wanted viewers to “be ready to buy it into a 5-percent to 10-percent decline for the stock” Or if the company does a secondary, that would give you in “a terrific entry point.”
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