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Thursday, September 14, 2006

MAD MONEY RECAP: Cramer Likes COSTCO (COST)

Cramer likes LOGI, HAR, TUNE, COST

Cramer discussed Best Buy (BBY) after it gapped down and then rallied. He said this is "pin action" to look for. He said volume was discussed and Home Theater Systems called the Magnolia center. He reviewed some of the best derivative plays there.

He said Sony (SNE) has a lot of products there, but he won't go there. He said you don't even need him to tell you about Corning (GLW) for this.

Cramer found 3 plays here: Logitec (LOGI), Harmon (HAR), Microtune (TUNE).

Cramer lays out his case for each. He did note that you need to use limit orders. He says if you buy before the company releases earnings and files its filing, but he says that TUNE is by far the gutsiest of the calls.

In a call-in Cramer was asked if Microsoft (MSFT) is the play for the holidays. Cramer said he thinks that MSFT is going to $30 but because of Vista more than just because of Xbox strength. In a call-in about HDTV, he was asked about Cirrus (CRUS) and texas Instruments (TXN). He said TXN is fairly cheapbut they make one processor; he said he won't turn her toward CRUS because they have been troubled for so long. He thinks that Corning (GLW) is the real way to play flat screens.

Cramer on the next segment discussed that CostCo (COST) has come down ever since it gave a disappointing earnings report. He wants to discuss if it is a broken stock, or a broken company. He said that if it is a broken stock it is a buying opportunity. It is down for 3 reasons: 1) missing same-store-sales quite a bit at 4% instead of 6.9%, 2) revising earnings guidance lower on electronics and furniture sales, 3) a broad slowdown in "Some" consumer spending. Cramer said that he doesn't really think COST is cheap compared to its competitors even after the recent drop. He says it is only a broken stock and he is Positive on the company. He says it will continue to grow organically and grow by expansion. He says that even their signature items are better than many branded issues.

Shares of COST are now up 0.85% at $50.43 on the day. It closed up 0.75% at $49.91 on the day and down from $52+ in mid-August.

Jon C. Ogg
September 14, 2006
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