Cramer’s Xmas Gadget Play: Best Buy (NYSE:BBY)

“It’s a gadget Christmas, and Best Buy Co., Inc. (NYSE:BBY) has the goods,” Cramer said on a recent “Mad Money” TV show. He told viewers to buy the stock ahead of the company’s earnings report due out on Dec. 15. Cramer pointed out that gadgets are flying off the the shelves: smart phones, e-readers, netbooks and flat panel TVs, and Best Buy stands to benefit. There are clues all over the place, Cramer said. Nokia (NYSE:NOK), the world’s largest cellphone company, said that handsets will grow by 10% in 2010. Apple Inc. (NASDAQ:AAPL) is experiencing big sales growth for its iPhone and iMac and reporting blowout quarters. Corning Inc. (NYSE:GLW) said it’s seeing strong demand for the glass used in LCD TV’s. Plus Microsoft (NASDAQ:MSFT) release of Window’s 7 will drive computer and laptop sales. Cramer said he expects Best Buy to report a big upside surprise when it reports earnings. The stock is less than a point off its 52-week high and it trades at just 13.6 times 2011 earnings with a 12.4% growth rate. Cramer said Best Buy is cheaper than just about every retailer in the space, including Staples Inc. (NASDAQ:SPLS), Target Corp. (NYSE:TGT), Kohl’s Corporation (NYSE:KSS) and J.C. Penny Company Inc. (NYSE:JCP). Cramer mentioned that Best Buy saw better-than-expected traffic on Black Friday and the company has lean inventories, which translates into higher margins. He told viewers to buy it ahead of the quarterly report because he thinks this quarter will bring the company back to its pre-recession glory. Join the fastest growing community of small cap investors at Stockhideout.com

1 Responses »

  1. Good to know Cramer.. good to know.

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