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Cramer's 'Mad Money Recap': Woodward Governor's Big Wind Power Play

TheStreet.com Staff

05/14/08 - 07:48 PM EDT

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

"I've got a stock that's levered to everything that's working," Jim Cramer told viewers of his "Mad Money" TV show Wednesday.

He once again touted Woodward Governor WGOV, which has beaten its earnings estimates six consecutive times.

Cramer last recommended Woodward on July 16, 2007. Since then, the shares have risen 17.4% in a market where the S&P 500 index has fallen 8%.

Cramer said he didn't realize just how much Woodward confirmed his thesis that high-tech companies are no longer in vogue and that what the market really wants are innovative industrial companies that solve real problems.

According to Cramer, Woodward is creating solutions and technologies that are in global demand. The company builds products to make gas and diesel engines more efficient and makes systems to reduce the emissions from aircraft turbines.

Cramer said he loved Woodward's exposure to Boeing's BA new 787 Dreamliner, but he was also enthusiastic about the company's wind power business.

He called the company a forward thinker that now estimates its wind power business to be worth $100 million by the end of fiscal 2008, compared to the consensus estimates of only $60 million.

To bolster its wind power business, Woodward recently added its first Chinese turbine manufacturer and is building a new factory in Colorado. He said the company's wind power business is growing at a staggering 150% a year, far more than any "high-tech" company can deliver.

Cramer: Think Infrastructure After China Quake

Yet much of Wall Street treats Woodward as a mere cyclical company, noted Cramer. He said the estimates for the company are way to low and the analysts "just don't get it."

Woodward trades at just 18 times its forward numbers with a paltry 12% long-term growth rate. This despite the fact that the company grew at 19% this past quarter alone. "It knows how to deliver," said Cramer, who estimated the company's real growth rate at 27.8%.

Cramer said that Woodward has everything we wants from a "new" tech company, and he targets the stock at $53 a share.

Investing in Organic Growth

Cramer welcomed back Bruce Carbonari, president and CEO of Fortune Brands FO, to the show to discuss his company's current outlook.

Cramer last recommended Fortune on Feb. 7. While the stock is up a modest 7% since then, the company missed its earnings estimates by three cents a share and narrowed its guidance, both of which raised eyebrows for Cramer.

Stockpickr

Carbonari said that while his company is forced to ride the trends in the housing market, most of Fortune's products appeal to the remodeling market and not the new home market. Cramer noted that 67% of the company's home products sell into the more stable remodeling market.

When asked about Fortune's decision to sell its US wine business to Constellation Brands STZ, Carbonari said the decision was made because of the shallow returns that segment provided to the company.

He also noted that Fortune's strategy is to invest in and grow its current brands, rather than purchase new brands. "Our company's best returns always come from organic growth," he said.

Finally, Carbonari discussed Fortune's exposure to the golf business. He said golf is growing both domestically and internationally and his company is positioned to grow with it.

Cramer agreed with his comments and recommended the stock on any positive news from the housing market.

Am I Diversified?

Cramer talked with callers to see if their portfolios have what it takes. The first caller's portfolio included Honeywell HON, Covanta CVA, Temple-Inland TIN, Schering-Plough SGP and Coeur d'Alene Mines CDE.

Cramer blessed this portfolio as diversified.

The second caller's top holdings included Procter-Gamble PG, Johnson & Johnson JNJ, Time Warner TWX, Cummins CMI and Clorox CLX.

Cramer identified two of a kind with Clorox and Proctor. He suggested selling Johnson and Time Warner and picking up General Dynamics GD and Apple AAPL.

The final caller's portfolio had AT&T T, Bank of America BAC, Transocean RIG, Corning GLW and Disney DIS as his top stocks.

Cramer liked JP Morgan JPM more than Bank of America, but called the portfolio "well played."

Mad Mail

In this segment, Cramer told a viewer that GTX Corp GTXI is a speculative stock and he'd be careful.

A second viewer asked about Conceptus CPTS, but Cramer said to stay far away from that one.

A third viewer asked about American Superconductor AMSC. Cramer said that he has many favorite wind stocks, but won't recommend American Superconductor.

Finally, Cramer told a viewer that he's still negative on Garmin GRMN since most of the company's businesses are not doing well at the moment.

Sudden Death

Cramer was bullish on Spirit AeroSystems Holdings SPR, ALCOA AA, Precision Castparts PCP, Honeywell HON and Diamond Offshore DO.

Lightning Round

Cramer was bullish on First Solar FSLR, Apache APA, Devon Energy DVN, Bristol-Myers Squibb BMY, HJ Heinz HNZ, Caterpillar CAT, DuPont DD and Goldman Sachs GS.

Cramer was bearish on ingli Green Energy YGE, Nextwave Wireless WAVE, Clearwire CLWR, RAM Energy Resources RAME, Electronic Data Systems EDS and Hershey Foods HSY.

Jim Cramer writes about all the stock trades in his charitable trust for TheStreet.com in Action Alerts Plus. Recent stocks he's traded in this account include Schering-PloughSPG, Yamana GoldAUY and Inverness MedicalIMA.

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.