Mad Money

Cramer: These gains could be enormous


"I'm constantly searching for positive outliers," said Jim Cramer. "When you find one the gains can be enormous."

By positive outliers Cramer means "Companies that are performing much better than others in the same industry."

And in the cyber security business, Cramer thinks Palo Alto Networks is a serious positive outlier.

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Looking at results posted by rivals Cisco, Checkpoint and Juniper, "Growth in network security has varied from lackluster to pitiful," Cramer said.

However, growth at Palo Alto has been very different.

"When, the company blew away the numbers, earning 11-cents a share, a one-cent beat, on higher than expected revenues that rose 49 percent year over year. That's some spectacular growth and it makes me think the company is taking share from the competition," Cramer said.

Cramer, however, wasn't surprised. He thinks Palo Alto offers extraordinary products and services.

"Not only does Palo Alto have terrific technology, but their platform also saves client's money by simplifying their security infrastructure and eliminating the need to buy multiple standalone products from various different vendors."

Also Cramer said a settlement with Juniper removes a serious overhang. "Yes, they had to fork over $175 million but that's much less than expected."

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But Palo Alto isn't just a positive outlier as a company. Cramer says the stock itself is also a positive outlier.

"At a time when high-multiple tech stocks are still having trouble getting traction, Palo Alto's been rebounding like crazy," Cramer said. "During the spring sell-off in the high-fliers, the stock dropped from $80 down to $58, but in just the last three weeks it's already bounced back to $74 and change."

And despite the bounce, Cramer thinks the path of least resistance remains higher.

"It's far from cheap here, but cyber security is the number one problem for the cloud and Palo Alto has the number one solution. I have to believe this stock is going higher."

Call Cramer: 1-800-743-CNBC

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