Cramer's 'Mad Money' Recap: Seeing Red in Security

The Little Railroad That Could

"The railroad still has legs," Cramer said, but he said that his old railroad bulls have had their run.

Union Pacific(UNP Quote - Cramer on UNP - Stock Picks), Burlington Northern(BNI Quote - Cramer on BNI - Stock Picks) and Norfolk Southern(NSC Quote - Cramer on NSC - Stock Picks) are companies he discussed weeks ago. So if you've bought them back then and made some money, he said it's time to ring the register.

They won't get the Justice Department to give them permission to consolidate anymore, Cramer said, adding that he thinks the growth is easing.

However, he believes there are still opportunities in Genesee & Wyoming(GWR Quote - Cramer on GWR - Stock Picks), "the greatest little railroad you never heard of."

This is a short-line railroad company, a company that hauls freight short distances, he said. And this means that it doesn't compete with the big mainline players and has more room to grow.

The company owns 47 different short-line railroads, and last quarter its revenue grew by 29% year on year, "pretty good in an industry that's been written off for decades," he said.

The stock has risen steadily for a year, but Cramer said he thinks it still has momentum because it is a "serious growth story, albeit a quirky one."

Instead of turning itself into a huge railroad company by buying other railroads, it's buying more short-line rail companies. Genesee & Wyoming has a model that works very well, and it's duplicating it "rather than trying to create something useless like another big mainline railroad," said Cramer.

He said the company is also "pimping all over the world," making a killing in Australia. It sold its property in western Australia and plowed the money back into a southern Australian railroad in which it already had a stake. Now, Cramer said, the company can consolidate the earnings.

He told a caller looking for a company that manufactures and distributes railroad products that Portec Rail Products(PRPX Quote - Cramer on PRPX - Stock Picks), down 5 points, is a good play.

As for railcar manufacturers, the said that American Railcar(ARII Quote - Cramer on ARII - Stock Picks) was one of single best IPOs of the last few years, but that Trinity Industries(TRN Quote - Cramer on TRN - Stock Picks) is cheaper.

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