September 18th - ATHR BRCM VRGY

Cramer started out by looking at Freescale Semiconductor Inc. (FSL) who was bought out and was looking to find the next stock that could fit its mold. Cramer named Atheros Communications Inc. (ATHR) and Broadcom Corp. (BRCM) as two take over targets who are good enough to own on their own

ATHR
Closing Price: $17.28
After Hours: $18.03
Percent Increase: 4.3%
Trades on NASDAQ
Sector: Technology
Short %: 12.5%
Days to Cover: 2.6
% Held By Insiders: 20.23%
% Held By Institutions: 90.10%

BRCM
Closing Price: $28.69
After Hours: $29.14
Percent Increase: 1.6%
Trades on NASDAQ
Sector: Technology
Short %: ?
Days to Cover: 1.0
% Held By Insiders: 7.02%
% Held By Institutions: 71.70%

Not surprisingly ATHR is up a bit more, which I can basically attribute to the fact it is cheaper. Also, looking at the insider and institutional holders for ATHR I can only assume that there is an error or a delay in some information as the holdings % is over 100%. Regardless of how wrong this is I have to assume that there is high non-retail investor holders of this stock, which in turn could reduce the float if they hold and drive the stock up on a low supply high demand scenario. They could also sell into the opening spike and pick the shares back up as the Cramer effect drop ends and thus help bring it down....but wouldn't they rather try to prop it up longer? We are hanging around $18 after hours but the stock was as high as $18.12 today so this is an ANGO no-short rule. Although I won't trade due to my rule, I will certainly watch with interest to see if $18 represents the top for tomorrows early trading. BRCM is also below its high for the day of $29.33, so once again an ANGO no-short. Although the rule is no 100% (closer to 50%) it has identified some strong stocks that have shown little to know Cramer effect drop.

Cramer continued his look at FSL and was trying to find other "spin-off" companies that could be taken over. His next pick was Verigy Ltd. (VRGY)

VRGY
Closing Price: $18.55
After Hours: $19.15
Percent Increase: 3.2%
Trades on NASDAQ
Sector: Technology
Short %: 0.81%
Days to Cover: 4.5
Average Volume: 124,612

Cramer did say to use limit orders and finished by saying that the company can't be sold very soon since it is so new and mentioned tax laws as the reason. He even said if you pay up $1 today that you will be down $1 in 3 days (the day he says you should buy based on his staff's research). This comment of course dropped the stock from $19.44 to $19.25. Even though Cramer says this could be down $1 in 3 days time, I still don't like the idea of holding a pick short that long since the market will take over beyond the first few minutes of trading the next morning and could drive the price up more. The stock jumped on September 11th from $16 to $18 and hit a 52-week high of $19.52 last Friday for a stock that has only traded since June. I think it has some potential for a quick drop right at the bell but am concerned about the recent strength and high numbers initially after hours. It also did break the 52-week high after hours briefly before Cramer spooked a few people.

Finally Cramer looked at forgotten stocks and said they can sometimes turn around and picked International Paper Co. (IP)

Closing Price: $34.18
After Hours High: $34.90
Percent Increase at High: 1.6%
After Hours Level Off Price: $34.59
Percent Increase: 1.2%
Trades on NYSE
Sector: Consumer goods
Short %: 1.80%
Days to Cover: 4.0
% Held By Insiders: 0.40%
% Held By Institutions: 88.00%

Certainly not as exciting as the other picks tonight and is showing in the small price increase after hours. The stock is slightly above its high for the day but my focus will certainly be on VRGY. With the high (that I saw) at $34.90, anything near that at the opening bell would probably represent a good short point.