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Cramer's 'Mad Money' Recap: Textron's Overlooked Business

TheStreet.com Staff

Click here for an archive of Cramer's "Mad Money" recaps.

"Even a wrong idea can lead us to a great stock," Jim Cramer told viewers of his "Mad Money" TV show Tuesday.

A viewer recently asked Cramer whether Textron (TXT Quote - Cramer on TXT - Stock Picks) was a buy based on its EZ-GO golf cart business. Cramer disagreed with this thesis, but he came to like Textron for other reasons.

Textron is down almost 27% since early December as Wall Street worries over the company's financial division have been mounting. But Cramer says investors should "forget about the financial division," citing that it accounts for only 6.6% of the company's revenues. "This has been way overblown," he said.

Cramer told viewers to instead focus on the company's military divisions, which account for 30% of the revenue. He said a recent report from General Petraeus in Iraq that called for troop levels to remain the same throughout 2008 will help Textron's military business. The company's military-related divisions manufacture armored vehicles, security systems and high-tech weapons systems.

Cramer also liked Textron's Bell Helicopter business, as well as its Cessna aircraft division. Both divisions, he said, should see strong growth this year.

Textron recently guided down its earnings estimates, but Cramer says the company is being conservative. He expects the company to earn up to $4 a share. The company trades at just a 13.6 multiple and has a 13% long-term growth rate. "It's time for Textron," he said.

A Oil Visionary

Cramer sat down for an interview with Jim Hackett, chairman, president and CEO of Anadarko Petroleum (APC Quote - Cramer on APC - Stock Picks), a man whom he described as "the best visionary in the oil industry."

Hackett said his company is strengthening its balance sheet to boost its exploration and drilling capacity. He said that only environmental concerns are standing in the way of U.S. energy independence.

He stressed that the natural gas industry has never had an environmental disaster. He said the country has huge untapped reserves in the Gulf of Mexico and Rocky Mountains that environment regulations will not grant them access to.

Regarding ethanol, Hackett said that "corn-based ethanol has real problems" and suggested that the U.S. should turn toward natural gas, the cleanest of the hydrocarbon fuels, to supplement its energy until science can deliver more viable alternatives.

Hackett also advocated more conservation. "We need to focus on the consumption side of the equation," he said. "To get prices down, we need to consume less."

Cramer praised Hackett for both his stellar performance at Anadarko and his vision and honesty regarding the country's energy situation.

Am I Diversified?

Cramer talked with callers in this segment to determine if their portfolios have what it takes. The first caller's portfolio included Goldman Sachs (GS Quote - Cramer on GS - Stock Picks), Bank of America (BAC Quote - Cramer on BAC - Stock Picks), Fluor (FLR Quote - Cramer on FLR - Stock Picks), Google (GOOG Quote - Cramer on GOOG - Stock Picks) and Verizon (VZ Quote - Cramer on VZ - Stock Picks).

While Cramer liked Verizon, Google, Fluor and Bank of America, he said Goldman Sachs and Bank of America are both banks. He recommended selling Bank of America and adding a defense contractor.

The second caller's top holdings included ExxonMobil (XOM Quote - Cramer on XOM - Stock Picks), Cisco (CSCO Quote - Cramer on CSCO - Stock Picks), Molson Coors (TAP Quote - Cramer on TAP - Stock Picks), Home Depot (HD Quote - Cramer on HD - Stock Picks) and Sirius Satellite (SIRI Quote - Cramer on SIRI - Stock Picks).

Cramer said he liked this portfolio, but would swap out Home Depot for Lowes (LOW Quote - Cramer on LOW - Stock Picks).

The final caller's portfolio had Foster Wheeler (FWLT Quote - Cramer on FWLT - Stock Picks), Verizon (VZ Quote - Cramer on VZ - Stock Picks), Altria (MO Quote - Cramer on MO - Stock Picks), MasterCard (MA Quote - Cramer on MA - Stock Picks) and Yamana Gold (AUY Quote - Cramer on AUY - Stock Picks) as his top holdings.

Cramer also liked this portfolio and reminded viewers that MasterCard is a better stock than Visa (V Quote - Cramer on V - Stock Picks) and is the one to own.

Mad Mail

In the segment, Cramer responded to a viewer's allegation that he pumps and dumps on the show by saying the practice is illegal and he's never done it.

He told another viewer that Canadian National Railway (CNI Quote - Cramer on CNI - Stock Picks) may be a good investment given the recent strength of U.S.-based CSX (CSX Quote - Cramer on CSX - Stock Picks). He said he's going to research the company further.

Lightning Round

Cramer was bullish on Apple (AAPL Quote - Cramer on AAPL - Stock Picks), Agnico-Eagle Mines (AEM Quote - Cramer on AEM - Stock Picks), Yamana Gold (AUY Quote - Cramer on AUY - Stock Picks), Goldman Sachs (GS Quote - Cramer on GS - Stock Picks), JPMorgan Chase (JPM Quote - Cramer on JPM - Stock Picks), Chevron (CVX Quote - Cramer on CVX - Stock Picks), ConocoPhillips (COP Quote - Cramer on COP - Stock Picks) and BP (BP Quote - Cramer on BP - Stock Picks).

Cramer was bearish on Hansen Natural (HANS Quote - Cramer on HANS - Stock Picks), Lululemon Athletica (LULU Quote - Cramer on LULU - Stock Picks), Titanium Metals (TIE Quote - Cramer on TIE - Stock Picks), CapitalSource (CSE Quote - Cramer on CSE - Stock Picks) and Washington Mutual (WM Quote - Cramer on WM - Stock Picks).

Want more Cramer? Check out Jim's rules and commandments for investing by clicking here.

For more of Cramer's insights during the Lightning Round, click here.