Cramer Gets Hot on Hot Topic (HOTT)

Jim Cramer is letting out a roar that would make the mighty Leonidas cower in fear. The cause? Hot Topic (NASDAQ: HOTT), the U.S. retailer alternative apparel.

Cramer's colleague, Dan Fitzpatrick, thinks that shares of the stock are ready to surge higher. Last week, the company declared a $1 per share special dividend, on top of a regular dividend going forward. Fitzpatrick said that the shares gapped higher on the announcement, about 18%, continuing higher, exhibiting a pennant pattern, signaling that the stock is being aggressively bought.

Cramer is a man of fundamentals, so he says that Hot Topic drew a line in the sand with the declaration of the dividend. The dividend, he contends, is a signal of the company making a turn-around...a sign of strength. He notes that the company is transitioning away from trendy movie-related merchandise. He says that their "Torrid" chain of plus-size trendy apparel is also doing well.

Cramer notes that due to a 4% reduction of inventories and $2.77 in cash on the books, the stock may finally be seeing their long-awaited turn around.