Cramer's 'Mad Money' Recap: Play Dirty With These Names

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The world is going to spend more to be cleaner and investors need look no further than the BASF's(BF Quote) recent bid for Engelhard(EC Quote), Jim Cramer said on Wednesday's "Mad Money" TV show.

BASF, the world's largest chemical company, wants Engelhard because it makes emissions-control systems that companies need to comply with environmental regulations, said Cramer, who pooh-poohed the idea that the German firm wanted Engelhard for its auto-parts business. Let's take this deal and draw inspiration from it.

Companies that make dirty things clean are tremendously undervalued, Cramer said, and environmental regulations are only getting tougher.

He said that to get in on the trend, viewers should look at four clean-up companies including KFx(KFX Quote), which turns low-energy coal into high-energy fuel without violating pollution standards.

He also recommended Pall(PLL Quote), which makes filters used for purposes ranging from semiconductors and planes to blood and cardio filtration, and Calgon Carbon(CCC Quote), a hazardous-waste engineering company that takes care of water purification.

But if there's one stock in the sector he said investors should pick up, it's ADA-ES(ADES Quote), which works with utilities companies to meet regulatory demands.

State environmental laws are getting tougher, which should help companies in this sector.

Cramer also wanted to give viewers a piece of the energy sector that hasn't been played out, so he said to check out PW Eagle(PWEI Quote)

The PVC pipe maker is a buy because it makes the pipes that move natural gas, said Cramer, who called it a business with late-stage leverage.

The stock went up a lot last year, but Cramer believes it's still cheap and has room to grow.