Cramer Changes Up Mobile Internet Index

Last summer, Mad Money host Jim Cramer introduced investors to his Mobile Internet index. This index consisted of 21 stocks that played a key role in the mobile internet tsunami that is sweeping the world.

Yesterday, Cramer celebrated the 1-year anniversary of the Mobile Internet index. The index has gained 29% over the past year, compared to only a 13% gain in the S&P 500 index.

Cramer also announced some key changes to the index in order to bring it up to date.

The worst performing stock in the Mobile index, Palm, has now been acquired by Hewlett-Packard (HPQ: 29.46 0.00%). And ADC Telecom (ADCT: 0.00 N/A) is in the process of being acquired by Tyco Electronics (TEL: 35.28 0.00%), so Cramer introduced Acme Packet (AKPT: 0.00 N/A) as the newest member of the Mobile Internet index.

Acme Packet makes equipment that enables fast delivery of voice, video, and data over the internet. The company has significant market share in this space and has been making great inroads into China. Acme’s largest customer is Verizon, which represents more than 10% of their business.

Cramer believes that Acme Packet stock is still attractively priced. The stock has a long-term growth rate of 26%, but only trades at a multiple of 22. However, since investors already have high expectations for this stock, investors should wait to buy on the dips.