Mad Money Recap
Cramer's 'Mad Money' Recap: June 25
TheStreet.com Staff
06/25/08 - 08:13 PM EDT
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Jim Cramer returned to the theme of clean offshore drilling on his "Mad Money" TV show on Wednesday. Cramer brought up the use of so-called subsea Christmas trees in offshore drilling. He said the trees are effective in making drilling safer and cleaner because they help control the flow of oil and gas as well as other fluids used to regulate pressure to reduce the chances of an oil spillage. He said the increased use of these trees and their connection to a single manifold helps oil companies reduce the number of rigs needed at the surface. Cramer said the market leader in this technology is an old favorite of his: FMC Technologies(FTI). The stock now trades at around $71, a substantial jump from $61, when he first mentioned it. FMC, which has $5 billion worth of work in backlog, expects another $1.8 billion worth of work in the next 15 months. Moreover it expects to grow 62% over the next five years. And it's considering a stock buyback of 10% of its outstanding shares. "It is my Christmas present to you," and that "this (stock) is really cheap in my book," said Cramer.
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Turning Trash to Cash
Cramer turned his attention to a potential duopoly in the waste management business with the acquisition of Allied Waste by Republic Services(RSG). Cramer said that this deal, which is expected to close in the fourth quarter, will make the combined company the No. 2 waste management company in the U.S., with control of 60% of the waste disposal capacity in the domestic market.
A New Tech Guy
Cramer introduced John McGlade, chief executive officer of Air Products(APD) to the show. McGlade told Cramer that APD is doing well enough that it can continue to raise prices despite the tough economic times. He also said the company had recently issued patents in the area of lithium ion batteries, which may be the future of hybrid vehicles. While it is working on that technology, it is currently supplying oxygen to Duke Energy(DUK) for the gasification of coal to make power. Cramer likes McGlade because he is a "new technology guy," and that investors should "buy APD."Final Notes
Cramer said investors should buy Research in Motion(RIMM) on the pullback.Am I Diversified?
The first caller asked about Costco(COST), Raytheon(RTN), Joy Global(JOYG), Proctor & Gamble(PG), and Chesapeake Energy(CHK). Cramer liked his diversification, saying it was "well-played." The next caller had Alcoa(AA), Apple(AAPL), Harley Davidson(HOG), Ford(F), and Solarfun(SOLF). Cramer noted Solarfun is a "spec," and Apple is like "playing with fire." He also said the caller should dump Ford and pick up Raytheon.