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Cramer's 'Mad Money' Recap: Dover Gets it Done

TheStreet.com Staff

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

"Our final 'new' technology company for the week is one that's focused on innovating to solve real problems," Jim Cramer told viewers of his "Mad Money" TV show Friday. He recommended Dover (DOV - Cramer's Take - Stockpickr) as the sixth stock in his series of great American manufacturing companies.

According to Cramer, what was once considered "high-tech," companies like Cisco (CSCO - Cramer's Take - Stockpickr) and Intel (INTC - Cramer's Take - Stockpickr), are now merely shadows of their former selves. He said it's the manufacturing sector that's now using technology and superior engineering to produce the products the world wants and needs.

Cramer first recommended Dover back on Aug. 26, 2005 at $35.85 -- a recommendation that is now up a modest 26%. But he still sees a lot to get excited about at Dover.

Cramer called Dover a mosaic of a manufacturing company, with many unrelated businesses under a single umbrella. The company derives 19% of its sales from electronics, 17% from mobile equipment, another 17% from engineered products, 13% from industrial winches, 11% from energy and another 10% from fluid solutions. Cramer said the company is seeing strong growth in Asia, which is growing at 25%, and the company gets 45% of its overall revenues from overseas.

Dover is also shareholder-friendly, said Cramer. The company still has $311 million left in its stock repurchase program and is one of the top-five dividend raisers in the S&P 500. Dover has raised their dividend for an impressive 52 years in a row.

Cramer noted that while Intel trades at 15 times its earnings and has a 12% growth rate, and Cisco trades at 19 times its earnings for a 15% growth rate, Dover trades at a scant 12.6 times earnings for its 15% long term growth. His bottom line was that Dover is great manufacturer deserving of a much higher multiple.

Go With General Mills

Cramer welcomed Ken Powell, president and CEO General Mills (GIS - Cramer's Take - Stockpickr), to the show to discuss what he called one of the best run companies around. Cramer praised Powell for the company's great management, overseas growth and substantial stock repurchase program.

When asked how General Mills was able to grow its top line amidst unprecedented raw cost inflation, Powell explained that his company is extremely focused on increasing productivity. Cereal is a staple of the American diet, he said, and General Mills is doing everything it can to keep it affordable.

Powell also explained that cereal is a category that's driven by innovation, responding to the changing marketplace and supporting great brands, and that's exactly what General Mills does. His company is increasing its distribution and expanding shelf space in stores year after year.

Powell also responded to Cramer's questions regarding ethanol. "There is no question that this is the wrong time for ethanol," he said, explaining that worldwide demand for food is at an all-time high. "There's never been more demand for food as food," he said.

Cramer told viewers "any time this stock goes down, you buy it."

Next Week's Game Plan

For next week's "Game Plan." Cramer recommended getting ahead of the big money managers and playing the sector rotation game.

According to Cramer, the recent rotation out of industrial stocks and into technology, financials and retails stocks is just plain wrong. If he's right, Cramer says the markets will rotate right back into the real winners in the current economy, agriculture and the oil and gas complex.

Cramer told viewers not to rely on just his opinion, but to instead look company's like Cleveland Cliffs (CLF - Cramer's Take - Stockpickr), Anadarko (APC - Cramer's Take - Stockpickr), Fannie Mae (FMN - Cramer's Take - Stockpickr), Cisco and Transocean (RIG - Cramer's Take - Stockpickr), all of whom report next week, for clues as to which way the market's headed. "These stocks will give you the evidence you need to make a decision," said Cramer.

"I'm betting this rotation is wrong," said Cramer, "but let's wait until next week and see if its real or phony."

Lightning Round

In the Lightning Round, Cramer was bullish on Illinois Tool Works (ITW - Cramer's Take - Stockpickr), Applied Materials (AMAT - Cramer's Take - Stockpickr), DaVita (DVA - Cramer's Take - Stockpickr) and Kinder Morgan (KMP - Cramer's Take - Stockpickr).

Cramer was bearish on Bear Stearns (BSC - Cramer's Take - Stockpickr), Taser International (TASR - Cramer's Take - Stockpickr), Conceptus (CPTS - Cramer's Take - Stockpickr), Synchronoss Technologies (SNCR - Cramer's Take - Stockpickr), St. Joe (JOE - Cramer's Take - Stockpickr), Tenet Healthcare (THC - Cramer's Take - Stockpickr) and Garmin (GRMN - Cramer's Take - Stockpickr).

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.