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A Turnaround Tech Stock That May Surprise You

Sun Microsystems is a company that Cramer has hated for a very long time. But he’s willing to admit that new management has come in and shaken things up. With that and few other factors in mind, he sees an easy two points of upside in the stock, but investors need to be careful.

As with all the speculative names Cramer talks about, especially the stocks that trade under $10, it’s important to wait for a good entry point before buying. There are two points of upside in Sun if you wait until at least Monday.

But this is only two points up. Don’t be the moron who only makes $1.25 by paying up way too much for the stock. You don’t need to do that. It will work higher over time if you’re just patient enough not to jump all over it like a wild animal.

Here are some reasons that Cramer has changed his mind about Sun:

* It’s going through a major restructuring that is showing results.
* Revenue increased for the first time in five years during their fiscal 2006. Now Sun is projecting operating profits in 2007 – the first since 2002.
* The company is on track to cut annual operating costs by $500 million.
* By 2009, Sun plans to bump up their operating margins to 10% from the 3% they reported last quarter.
* Sales of its operating system, Solaris, are growing even faster than expected.

Besides all that, Sun’s server business is booming, the software business is strong and private equity fund KKR bought $700 million dollars of convertible debt – notes that can be turned into stock – in the company, equaling 5% of the company. KKR wouldn’t make this kind of investment unless they believed, as Cramer does, that Sun Micro has real upside.

Bottom line: Cramer hated Sun, now he likes it. He sees two points up, but only if you buy the stock carefully and patiently, using limit orders. Otherwise the shorts will eat you alive.

Questions? Comments? madmoney@cnbc.com