A Bet on Upside
I want to put some cash to work this morning, and I'm going to purchase 1,000 shares of Discovery Holding (DISCA) after you receive this Alert. At $22.55, the stock is a full point below my cost basis, and I believe the market has yet to fully grasp the company's growth potential.
That should change this spring when Discovery recapitalizes, a move that should make its financials much easier for investors to understand. The company's core cable channels are performing well at home, and management also has an attractive international growth strategy. The addition of major stars like Oprah Winfrey and Emeril Lagasse should also ensure that two of its startup networks will garner a lot of interest.
In the meantime, I believe that the stock has 5 or 6 points of upside potential over the coming quarters. This purchase will give me a total of 7,500 shares of Discovery Holding, or 4.3% of the overall portfolio.
Regards,
Jim Cramer
DISCLOSURE: At the time of publication, Cramer was long Discovery Holding.
Send email to james.cramer@thestreet.com.