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Men’s UGGs Should Boost Deckers Shares 10%

Tuesday, 30 Nov 2010 | 3:38 PM ET

Deckers Outdoor’s renewed push into the men’s shoe market, thanks to an endorsement from New England Patriots Quarterback Tom Brady, could add as much as 10 percent to the share price, Cramer said during Tuesday’s “Stop Trading.”

Cramer Gets Uggs-ly
Uggs for men could add 10% to earnings for Deckers, according to "Mad Money" host Jim Cramer.

After starting first as a men’s surf-wear brand, CEO Angel Martinez told “Mad Money” on Monday, Deckers later became popular for its iconic UGG women’s boots and other shoes. But the company is once again concentrating its efforts on growing the men’s line, an as-yet-untapped segment of the business. That’s where Brady comes in.

“If this company has the kind of numbers from men’s [shoes] that Tom Brady is driving,” Cramer said, “you are going to see numbers dramatically raised on Deckers.”

“I want to add 10 percent to the earnings,” Cramer said, “which means the stock could go up 10 percent.”

The move was so unexpected that Cramer has found absolutely no Wall Street research that accounts for the potential jump in sales in DECK’s earnings estimates, if men’s shoes prove to be a success. And if Martinez’s track record is any indication, then Cramer thinks success is very likely and should bring “substantial upside.” Then analysts will be forced to raise their estimates, “and that’s why this stock is not done.”

Cramer also responded to reports that Google would buy online coupon company Groupon for $6 billion, saying Groupon’s business model “doesn’t seem very proprietary to me. I give Google the benefit of the doubt, but I don’t want to own the stock until I find out the details.”

“This reminds me of when Microsoft got so big it was the law of large numbers—you got to do something,” Cramer said. “I wait to hear the defense of Groupon, but I can tell you that if they had thought of Groupon two years ago, it wouldn’t have cost two nickels.”

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

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