Make a dash for Sprint

And stop fixating on Research In Motion, Nokia and Yahoo.

By Jim Cramer Aug 10, 2012 9:53AM

Why do people spend so much time talking about Research In Motion (RIMM), Nokia (NOK) and Yahoo (YHOO)? Why?


And why don't they spend more time talking about Sprint (S)?


I have no idea how the turn will go at Yahoo. I do know that it will not be a quarter or two turn. Maybe three? Perhaps four. The company has no mobile, social or cloud strategy. Until it does, I think you've got some real flat-lined time on your hands.


Research In Motion? That's only about takeover. You have 70 million subscribers and a good keyboard, but it is a closed ecosystem, so you are buying a list and some patents and an enterprise services business. That list is way too expensive for almost all companies, although the keyboard patents have real value and we have rumors right now that IBM (IBM) wants the enterprise service business. One would have to hope that the enterprise services business, like the patents, is worth so much that this could be a positive situation, like AOL (AOL), and not a negative one, like Kodak. 


Still, I would not recommend a stock just on its parts valuation when the fundamentals are horrendous and the spiral down in cash has just begun. That's too dangerous. 


Nokia is interesting only because of its low price tag. If it were to do a 10-1 reverse split, no one would touch it.


But Sprint? Here's a company that generates a huge amount of cash flow that needs to raise cash and can now do so, which would dramatically lower its interest charges in a way that is certainly profoundly positive. RIMM and NOK are in vicious cycles down, while Sprint is in a virtuous cycle up.


Many people had doubted whether Sprint could ever recover from the phenomenally terrible Nextel acquisition. The transition out of that technology and into Sprint's was supposed to be too difficult. But CEO Dan Hesse has pulled it off and is keeping far more subscribers than I thought possible.


Of course the stock has run from $2 to almost $5. But that's what is going to happen when you take bankruptcy off the table and you go from horribly unprofitable to cash-flow positive.


Can it keep rallying? I think yes. I would like if the stock were to take a breather here. It seems like too quick a run. But I think it is still worth buying if you recognize that it could trade down to $4 and change on a couple of bad days.


Sprint is for real. Yahoo is wait and see. The others? Nokia may one day turn it around, but it might not ever happen. Research In Motion? You are simply trading around the rumors of a stock that I believe will go lower when it reports.



Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and has no position in the stocks mentioned.




More from TheStreet.com

 

9Comments
Aug 10, 2012 11:26AM
avatar
Our company is in the construction business with about 150 employees and about 120 Sprint/Nextel phones, We had been a Nextel customer for about a dozen years and were completely satisfied with the service. Most of the vendors we use on a daily basis were also Nextel customers. Our employees could order ready-mix concrete, lumber, sand and gravel, etc with the walkie-talkie system. It was flawless. Sprint shut down the Nextel system in the middle of May and switched to their supposedly superior system. It is absolute garbage. The push to talk works less than 15% of the time. The phone portion is erratic. emails sometimes come the next day. They have given us update after update and it has done no good. We are in the process of switching carriers. It Mr. Cramer thinks this is a good company, he needs to talk to the customers in central Illinois.
Aug 10, 2012 11:33AM
avatar

"if mr cramer thinks this is a good company he needs to talk to the customers......"

 

this is wrong thinking...........mr cramer isn't about good companies.....he is a con man

pumping and dumping stock

Aug 10, 2012 1:02PM
avatar

shorting gold, alcoa, and nyx would have been huge

 

i think the secret is to ignore most of his picks as some go up and just as many go down.........

but when he touts something as best of year (nyx at 96 now 35) or best dow stock of 2011(alcoa

at 18 now at 9), or gold as a must buy at 1900 now 1600...............that is the pump and dump and time to short.

Aug 10, 2012 3:49PM
avatar

Yes, good recommendation!  I love it - Sprint!  Know what... I'm on it.  Put me down for 2, 3... no 5 shares!!   

Aug 10, 2012 11:46AM
avatar
HEY JIMMY BOY, WHAT WAS I SAID ABOUT YOUR STOCK PICKS?? OH YEA SELL SELL SELL
Aug 10, 2012 5:45PM
avatar
Wrong time to buy.  Sell if you bought at 2.50.
Aug 12, 2012 7:53AM
avatar

"But I think it is still worth buying if you recognize that it could trade down to $4 and change on a couple of bad days." I guess he is warning us of this high price and suggest to buy $4.


Aug 10, 2012 1:01PM
avatar

So exactly how much is Sprint paying you?

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

124
124 rated 1
279
279 rated 2
471
471 rated 3
714
714 rated 4
642
642 rated 5
604
604 rated 6
614
614 rated 7
450
450 rated 8
303
303 rated 9
115
115 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
ARCPAMERICAN REALTY CAPITAL PROPERTIES Inc10
BIDUBAIDU Inc10
CITCIT GROUP Inc NEW10
HPQHEWLETT PACKARD CO10
ITUBITAU UNIBANCO BANCO MULTIPLO S.A.10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.