Bucyrus Is a Buy on China's Resurgence

Bucyrus International (BUCY - commentary - Cramer's Take) really captures this moment. When I was speaking last night to its terrific CEO, Tim Sullivan, I was conscious that his company's stock is at the fulcrum of everything that is going wrong and everything that is going right in this market.

Bucyrus, if you recall, makes mining equipment. It's really the only game in town other than Joy Global (JOYG - commentary - Cramer's Take), as the mining machinery business was annihilated by years of underinvestment.

The company became the quintessential play on mining as orders, particularly from China, for new coal mining equipment soared each year. China's opening a new coal-fired energy plant every week, so you know that there's demand.

The hedge funds glommed on to this one big-time. Like in so many that we are familiar with -- MasterCard (MA - commentary - Cramer's Take), Trinity (TRN - commentary - Cramer's Take), Foster Wheeler (FWLT - commentary - Cramer's Take), NYSE Euronext (NYX - commentary - Cramer's Take) and Freeport-McMoRan (FCX - commentary - Cramer's Take) -- they took concentrated positions in this and Joy Global and intended to ride the commodity boom for years.

Well, they rode it all right, right from its six-year boom into its incredible bust, and they sold all the way down from the $79 to the low teens, where it stopped going down, mostly because the hedge funds that owned it either sold it all and closed or simply told their investors to take a hike, and that they could not have their money back. (This last is an epidemic that is spreading like wildfire, and it is contributing to the bottoming we are seeing. They are at last out of the way.)

But, in some cases, the orders are going away too. Bucyrus has a confirmed non-cancelable order book of more than $2.5 billion, which makes this well-funded, $1.3 billion market-cap company pretty darned cheap. Yet we are now reading about big cancellations of mining orders. Last week it was Freeport's cancellation -- no impact on Bucyrus. Today Rio Tinto (RTP - commentary - Cramer's Take) is in the news eliminating $5 billion in spending.

ALL JIM CRAMER BLOG ENTRIES | POST A COMMENT | READ COMMENTS  

---

Jim Cramer is co-founder and chairman of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon.com purchases by customers directed there from TheStreet.com.