Jim Cramer’s Speculation Friday – Tekelec

For “Speculation Friday,” Cramer highlighted a mobile Internet stock that hasn’t been on the move with the rest of the sector. Cramer’s Mobile Internet Index is up 13.5% since its August 11 inception, compared to just 7.2% for the S&P 500. However, during the same time, telco equipment maker Tekelec (NASDAQ:TKLC) has been dead money. “I regard it as undiscovered,” Cramer said. “I think it has huge upside.” He explained that the problem with Tekelec has been the company’s most recent earnings. The company beat Wall Street expectations, but it reported only in-line guidance and said that India’s implementation of local number portability has been delayed. Tekelec makes the technology that allows people to keep their numbers when they switch cell-phone carriers. The company also makes equipment for transmitting text messages and managing voice traffic on wireless networks. Cramer mentioned that the stock ran from $11 to $19 a share, and investors quickly locked in profits following the India news. He said that’s a mistake because Tekelec’s fundamentals are still strong. Cramer pointed out that text messaging at AT&T (T), Verizon (VZ) and T-Mobile grew 12% from the previous quarter and jumped 80% year-over-year. “Tekelec’s products are vital to growth of modern wireless networks that can support the mobile Internet,” Cramer said. He told viewers the number portability is still a go in India, and it was just delayed until year’s end. Plus, once it kicks off five of India’s top seven carriers have established relationships with Tekelec, and the company controls more than a third of the number portability market there. International growth for Tekelec also looks good with 12 other countries expected to launch number portability in the next two years. Cramer said Tekelec trades at $16 and has $4 a share in cash.  At a modest multiple, he feels its worth $21 a share, but with a premium multiple you can get a $27 stock, or a potential 68% gain. Get the scoop on tomorrow’s hottest trade ideas – TODAY! BeaconEquity.com PREMIER PICKS have an amazing track record. Join this select group and ride the profit wave!

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