Mad Money

The Next Great Speculation Play


Goldman Sachs may rule the new cycle, but it’s most likely not making you any money. So rather than look back at what’s happened, Cramer on Wednesday wanted to look forward to what’s next.

Don't Turn Back Now

That’s why he’s trying to identify the next great speculation stock. Something like Huntington Bancshares , which is up 59% since Cramer recommended it on June 12, 2009. Or Ford , once a near-failed company that’s now thriving. Cramer likes the stock at $4 and he still likes it at $14.

So who’s the next potential spec breakout? Sprint Nextel . Cramer expects the company’s quarter to show a stabilized market share, fewer losses than expected and a respectable amount of customer retention, especially given the popularity of both AT&T’s and Research in Motion’s handsets.

Like Ford and HBAN, Sprint’s at $4 when Cramer is making his call. And also like those two companies back then, letter S has a balance sheet that analysts worry about. A lot of its debt is coming due, but Cramer thinks the company will also report stronger cash flows with its quarterly numbers. That should ease some of the pressure on that balance sheet.

Finally, there’s Cramer’s buy-sell-hold ratio. Right now there are just eight “buys” on the stock compared with a total of 33 analysts covering Sprint, making at 24% ratio. The potential for the Street to change its mind here is high, and their conversion would push up the share price. Also, if the analysts turn bullish on Sprint, meaning they’re confident in the fundamentals, then a number of potential acquirers might, too.

“The upgrades and the very [real] possibility of a takeover,” Cramer said, “will make this stock soar.”

Call Cramer: 1-800-743-CNBC

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