Cramer: An unknown stock screaming to be bought

In the current market environment, Jim Cramer knows that it is very hard to find new stocks that are roaring higher.

That is why the "Mad Money" host decided to go off the charts to speak with Bruce Kamich, a market technician who is a professor at Baruch College and colleague of Cramer's at RealMoney.com.

Kamich has found a stock that has been on fire and could keep skyrocketing. Chances are, investors may have not heard of this stock before.

Tyler Technologies is the country's largest provider of integrated software and information technology systems used exclusively by the public sector. It helps cities, states, counties, school districts and other local government entities run more efficiently.

Last week, Kamich took a look at the weekly chart of Tyler and was stunned at what he saw.

"It's the kind of chart that jumps out at you and screams 'buy me,'" Cramer said.





"It's the kind of chart that jumps out at you and screams buy me" -Jim Cramer

What made this stock so attractive to Kamich was the action on the charts stemming all the way back to 2011. It traded in the low teens back in 2011, and slowly crept up to $105 at the beginning of last year. It was slammed with the rest of technology in the spring of 2014 and pulled back to $75, and closed at $148 on Tuesday.

Not only is that an amazing trajectory, but Kamich thinks this stock has more room to run. Looking at the daily chart of Tyler, Kamich noted that it has been rallying steadily higher in a staircase pattern. This pattern is often regarded as a bullish formation.

Based on what is happening in the charts, Kamich believes this stock could roar up to $200. He recommended buying the stock on a pullback down towards the $140 level, and would put a stop loss in and start selling below $130 because that would suggest the uptrend has been broken.

"I would never recommend a high-flying tech stock that you have never even heard of before without also digging into the fundamentals, the facts about the actual company and how it is doing," Cramer said.

Cramer found that state and local governments spent $9 billion on vertical specific software last year, and that number is expected to grow to $13 billion by 2019. Additionally, many public institutions are still using very old legacy systems that need modernization.

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Tyler has a cloud based software-as-a-service side of the business that has been growing tremendously, as the company had 42 percent subscription growth last year. The company also delivered a fantastic beat and raise quarter when it reported in July.

So while the stock is expensive at 48 times next year's earnings estimates, Cramer does acknowledge that there are some risks with a stock that has such a lofty valuation, regardless of how it is doing.

"I'm only blessing Tyler for speculation, because if our economy takes a hit and those local tax receipts start falling, then this stock could turn on a dime," Cramer said.

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