If Verizon’s doing as well as CEO Ivan Seidenberg claims, there have to be smaller companies that can piggyback off the company’s strength, Cramer said.
Enter ADC Telecom , classic Mad Money pin action. ADCT – “the forgotten man of telephone,” Cramer called it – is coming back to life thanks to Verizon’s and AT&T’s push into fiber optics, which they use to bring voice, internet and television services to their customers.
ADCT makes the communications equipment that connects voice, video, data and internet to these companies’ networks. Cramer expects ADCT to ride out this fiber-optic build-out for the next couple of years. And that means investors can hold the stock for just as long.
And it isn’t just fiber connectivity that’s bringing this company back. A recent earnings beat should put ADCT on Wall Street’s radar. And so should two recent acquisitions: Century Man, which is number two in the Chinese distribution frame connectivity market and gives ADCT some low-cost manufacturing facilities in China; and LGC, a company that focuses on “in-building” wireless coverage. It’s a good buy for ADCT since 70% of wireless calls are made from inside buildings and LGC helps improve coverage for those calls.
So while ADCT might have been forgotten, “they never left,” Cramer said. “They’re back in the sweet spot of telco.”
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