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Cramer's 'Mad Money' Recap: Trinity's Hidden Treat

TheStreet.com Staff

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

"We are big believers in wind power," Jim Cramer told viewers of his "Mad Money" TV show Thursday. He explained that wind power is a fabulous source of green energy. But when it comes to wind power stocks, all of the best companies are often buried within other companies.

That's why when a caller asked about railcar maker Trinity Industries TRN in Wednesday night's lightning round, Cramer said "sell, sell, sell." But upon closer examination, Cramer discovered that Trinity is also the largest manufacturer of wind towers.

Cramer compared Trinity to Apple AAPL circa 2002, when most investors saw the company as merely a computer maker and totally ignored the hidden potential in the company's now ubiquitous iPod.

Trinity, it turns out, has a growing wind power business with a $750 million backlog. And while wind power only accounts for 6% of the company's sales, Cramer expects that percentage to increase to 10% by next year. Trinity is currently building a second wind tower factory in Mexico to help meet its growing demand.

At just eight times its earnings, and down 41% from its recent highs, Cramer called Trinity's stock a steal, and recommended investors jump in now, ahead of what he expects to be one more difficult quarter for the company. "The wind story is here," said Cramer.

A Mighty Wind

Continuing on his wind energy theme, Cramer also recommended Otter Tail OTTR, a company with a funny name, but also one with another hidden wind power business.

According to Cramer, Otter Tail's wind power division, DMI Industries, is "on fire." DMI accounted for 27 cents a share of the company's most recent earnings, up 42% from just 19 cents in 2006. Cramer said this 63% growth is hard to find in any industry.

Cramer speculated that if Otter Tail were to spin off its DMI division the stock could double in value. DMI, he said, has a solid $289 million backlog and an 18% market share. The company is also expanding its three plants in Canada to help meet its growing demand.

Cramer called Otter Tail "the best play for wind power out there," and encouraged the company's management to bring DMI to the forefront of their earnings calls. He called the strong a strong buy under $37 a share.

Sell Block

Cramer put himself in this week's "Sell Block" for not recommending Covanta CVA to viewers earlier in the year. "Missing big gains is a sin," he told viewers. "I deserve to be punished for missing this move," he continued.

Covanta is the country's largest waste energy company, and converts 15 million tons of solid waste into energy every year at its 32 facilities nationwide. The company commands a 50% market share and just recently announced its second partnership in China.

Cramer explained that he neglected to recommend Covanta because of Sam Zell's purchase of the company out of bankruptcy back in 2003. "I wasn't a fan of Zell," he explained. But given the company's 3.3% pullback today, he said Covanta's prospects make the company just too compelling to pass up.

Give Nucor a Nod

Cramer welcomed Dan Dimicco, chairman, president and CEO of Nucor NUE to the show to discuss the company's outlook.

Dimicco explained that his company reported record first-quarter earnings and the supply and demand equation is in perfect balance. He explained that the combination of a weak dollar, fewer Chinese exports, and increased global supply is keeping the steel business in bull market mode.

Cramer said Nucor is a great stock with consistent earnings, and while he still likes US Steel X, Nucor is worth owning.

Sudden Death

In Sudden Death, Cramer was bullish on Corning GLW and Dynegy DYN.

Cramer was bearish on Incyte Corporation INCY.

Lightning Round

In the Lightning Round, Cramer was bullish on Nike NKE, Salesforce.com CRM, Companhia Siderurgica Nacional SID, Honeywell HON, CPFL Energia CPL and ABB Ltd ABB.

Cramer was bearish on Under Armour UA, Crocs CROX and NetSuite N.

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.