As you have probably already noticed, when Jim Cramer recommends or highlights a stock on his daily show, the next day, the herd runs in to buy driving prices up.
Appealing to a person's greed is the largest selling point of any business. In this situation however, I want to show you how an insider took advantage of a run up in his company's stock after Cramer highlighted it on his show.
On Friday, March 3rd, Cramer talked about MRV Communications (MRVC)
He said,
" MRV Communications (MRVC) even with the stock dropping from $91 to $3 after the tech bubble burst. With over 70% of MRV's sales coming in Europe Cramer loves the numbers. Estimates are way to low. Gross margins jumped from 0% in the third quarter to 20% in the fourth. MRVC could see 30% sequential sales growth in its optical business in the first quarter of this year also. Momentum is huge here also, starting the year at $2 and up 60% since. Cramer added, "If you get momentum sickness, I think you should avoid this one."
Watch what MRV dirrector Igal Shidlovsky did after these comments.
On March 6th, the Monday following Friday's commentary, Shidlovsky exercised an option to buy 10,000 shares at $2.05. He turned right around and sold those shares the same day at $4.12.
I hope he sent Cramer a thank you note.
