Jim Cramer Is Bullish On VeriFone Systems Inc

CNBC Mad Money's Jim Cramer said on the show that he is a buyer of VeriFone Systems Inc (NYSE: PAY). Cramer thinks that the retailers will have to upgrade their payment terminals because in October 2015 there are going to be some changes in liability when it comes to security breaches. The retailers could become liable in cases of credit card data theft if they don't have EMV point of sale terminals, said Cramer. He thinks that hey will buy them from VeriFone Systems Inc because the company is the leader in this market.Another catalyst for the stock to go higher could be Apple Pay because the retailers will have to have a compatible payment terminals with Apple Pay and that would also increase the sales of VeriFone Systems Inc. Around 30 percent of payment systems in the U.S. are EMV compatible at the moment and that could grow to 70 percent by 2016, said Cramer. He thinks that it is reasonable to expect at least $250 million of incremental sales for VeriFone Systems Inc and the company should be able to increase its revenue annually for 9 percent over the next three years.Cramer believes that the company is going to be able to make $2.50 in 2016 fiscal year and with its current P/E of 17 he sees the stock at $42.50 per share. If he is right about the upgrade cycle, the stock could reach $48.