
A week after Valentine's Day, Jim Cramer offered his "Mad Money" viewers dating advice for their portfolios.
"Try looking for the stocks of companies that have recently been broken up with," Cramer said. "Why? Because those are the stocks where you're most likely to get lucky — financially speaking."
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Take home security company ADT, for example, which was spun off in the breakup of conglomerate Tyco International.
ADT showed $693 million in operating income in fiscal 2011 on sales of $3.11 billion. Analyst estimates of its market value range from $8 billion to more than $11 billion, with the higher estimates taking into account a takeover premium.
To Cramer, though, ADT is a play on the recovery of the U.S. housing market, which he considers one of the strongest themes in 2013.
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With about 6.5 million subscribers in the United States and Canada, ADT will be the only publicly listed U.S. company focused on security monitoring, with a growing business in home automation systems. It will be the largest player in a fragmented $12.5 billion market. The company also offers fire alarms and carbon monoxide detectors.
"Not only is ADT the biggest name in safety and security, it's also the only pure play out there, which makes it a prime target for a takeover," Cramer said. "But that's merely the icing on the cake for me and I would prefer to see ADT buy other companies in its own line of work in order to consolidate this fragmented industry."
Cramer doesn't recommend speculating on takeovers unless the company's fundamentals are sound. In this case, he thinks ADT's fundamentals are excellent. He also likes that the company is cutting costs and paying down debt.
ADT's stock currently pays a 1 percent dividend yield, but Cramer noted the company has $1.9 billion on its buyback authorization. Looking at current levels, he thinks ADT has much more room to run and considers it a buy, buy, buy!
When this story was published, Cramer's charitable trust owned ADT.
— Reuters contributed to this report
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