Skip to main content

Revisiting an Old Holding

Cramer caught a good gain in the winter, and now it's time to go back in.
  • Author:
  • Publish date:
Comments

Dear Action Alerts PLUS Subscriber,

My sale of Pfizer (PFE) has created room for a new position, and I think it's time to revisit InterActiveCorp (IACI) here around $38.04 a share.

eBay (EBAY) cut guidance two weeks ago, and it's now trading where it was before the warning. Amazon (AMZN) capped its growth target last week, and that stock also has recovered nicely.

InterActiveCorp, however, has lagged the group. And after you read this note, I'm going to start a new position in IACI with 1,000 shares.

Readers will remember this is a stock I was buying in January and February and sold two months later because we'd caught a quick 30%-40% gain. InterActiveCorp has pressed higher from there, but I think it can catch up to its peers in the near term, in part because the company has the best management and the best balance sheet in the industry.

What really tipped the scales in my favor here, though, are the prospects for the Google IPO. The buzz around this deal is amazing, and it's at least a few months away. When Google takes the plunge, I think InterActiveCorp could be 10 points higher than it is right now.

P.S. Am I going to sell Schering-Plough (SGP) next, now that I've unloaded Pfizer (PFE) ? No way, this one's too cheap at $15. Schering is takeover bait if Fred Hassan doesn't unlock the value in that brand first.

Regards,

James J. Cramer

DISCLOSURE: At the time of publication, Cramer was long Schering-Plough.