Financial News Discussion of TKLC - Tekelec on Mad Money

Tekelec is in the news. Find out how this impacts TKLC trading on Ockham Research.

>>> for speculation friday I want to put a spotlight on the speculative tech stocks that have been left behind. I call them the forgotten tech actually, there's really only one of them. And the name is TEKELEC. TEKELEC. While the stocks in the mobile internet index I created on august 11th, that was a way to measure the smartphone revolution. They're up an average of over s&p's up about half of that. TEKELEC is flalt since I created the index. Flat. That's a travesty. By the way, the speculative stocks i've recommended since early may, they've done even better. They're up an average of 30%. That's leaving my new fave TEKELEC in the dust. It's an underperformer. But I think it has what it takes to become a 57 variety heinz catch-up play as in c-a-t-c-h. Catch-up. I like these speculative tech I really do. And as part of a feel bet on the guts of the mobile internet it's it's either smartphone components or wireless network equipment makers. In a field bet like I discussed in "jim cramer's real money: sane investing in an insane world." and I elaborate on in my new book kimming out next month "jim even:your personal economic recovery plan." you take a basket of stocks in an industry you think is going to roar. TEKELEC should be part of your mobile internet basket. Precisely because it's the stock that hasn't gone anywhere. Therefore, I regard it as undiscovered versus the rest. I think it has huge up side. The stock's massively undercovered by the brokerage only seven analysts follow it. Only one of them likes it enough I think that's nuts. Fundamentals i'm about to run down for this company. TEKELEC is a telco equipment for a particular kind of business that you and I both know, or if you have kids you know is red hot. Transmitting text messages. And also managing voice track on wireless networks. Technology also, this is another one for those of you who've ever switched carriers. It lets you keep your phone number when you switch carriers. Portability. 35 prs share. That's gigantic. These are all the things wireless providers have to buy in order to build out the mobile you know we've talked about how we just don't have the infrastructure to support so many smartphones, especially those bandwidth-hogging iphones. TEKELEC helps the carriers deal with that when it comes to text messaging and talking. Okay, maybe it's not as sexy as video. But it's still vital to the growth of modern wireless networks that can support the gigantic. In the u.S. Messaging traffic at at, verizon, and t-mobile was up up 80% over the previous year. With maybe a little under half of that coming from my kids. Don't you want to own the making texting possible? Okay, cramer, I hear you saying. If TEKELEC is so great, how come it stunk up -- why has it lagged all the other stocks you simple. TEKELEC got crushed from august 4th to august 6th after reporting earnings. The stock has yet to recover from that sell-off. It's more than a month ago. It sold off after reporting a 4-cent earnings beat. Expected. Delivered in-line guidance. But there was a flaw. A lot of the damage was caused by investors who had caught the run in TEKELEC from $11.30 to $19.64 and I think they were taking money off the table. Problems with the quarter? Even though demand in emerging markets has picked up, developed the ground like us. I'm not worried here. TEKELEC saw some signaling orders coming from companies like verizon. Att, that stock did well today. Bun begun to spend on the mobile internet buildout, which is why order trends to improve in the I believe TEKELEC. I think the real reason, frankly, for TEKELEC's pole-axing has to do with india, which has the fastest-growing wireless network in the world, something you might have had a hint of if you watched "slumdog millionaire." TEKELEC's business was supposed to launch nindia bit end of it didn't. By now it's expected to happened fingers crossed. As TEKELEC already does business with five of the top seven carriers in india and controls for local number portability, india should be gigantic for that's why I don't mind the I don't think delay matters. TEKELEC wasn't expecting local number port lilt in indbilt to hit its income statement anyway. The delay will not hurt numbers. I think this is the time. International opportunity still now picking up, TEKELEC is, yes, a speculative buy. There are ten more countries implementing local number portability in the next two years -- argentina, brazil, china, chile, ecuador, peru, russia, thailand, turkey. >> tall aboor! >> buy buy buy! >> on the text messaging side carriers are getting even more sprint coming out with the plan, unlimited e-mail access, texting, and gps navigation $70 I may have to switch to that. That's the lowest price yet. Sprint's desperate for business but the other carriers will likely so to follow suit and that means more business for TEKELEC's equipment. TEKELEC say $16 stock and has $4 in cash it has no debt. You back out the cash, 12 times earnings. There's not a whole lot lower the stock can go without starting to attract real buyers, so to speak. It can lek's expected to earn a dollar in 2010. I think that's conservative. I think you can go with $1.35. That would make 16 times earnings, the current multiple, get a $21 stock. But if it gets a higher more reasonable -- I could argue 20 $27 stock masquerading as a $16 that's maybe as much as a 68% remember, it's speculative here we go again. Small stock.

• Since this tidbit appeared on Mad Money on Friday, September 18, 2009, Tekelec has had a pretty decent run trading up 11.34%.
• Jim Cramer mentioned quite a few stocks, 29 individual companies to be exact. You can see the all company slices for Mad Money on the recap page.
• There were 2 mentions of TKLC on just this episode. You can see the all company slices of those on the Mad Money recap page.
• TKLC has had 6 mentions, on various business television shows, since this one. Find out what was said with the latest financial news on Tekelec.
• The most active stock on Mad Money over the last 2 weeks has been Apple, Incorporated.