Stockpickr: Profit From Howard Hughes' Legacy

Billionaire Howard Hughes is primarily remembered for two things: his eccentric behavior, portrayed by Leonardo DiCaprio in the 2004 movie The Aviator, and the special bra he invented for actress Jane Russell for the movie The Outlaw.

But Hughes should really be remembered as one of the greatest American technologists, inventors and entrepreneurs. He pushed the technological edge in all types of aircraft -- helicopters, jets, satellites and rockets -- and he foresaw that this type of innovation would be needed by the government. (Not to mention the fact that his real estate holdings included a substantial chunk of Las Vegas.)

His companies live on today, although almost all are divisions that have been absorbed into other public companies. On Stockpickr, we've created a portfolio of companies related to spun-off components of the old Hughes empire. The idea here is that America is not finished with Hughes' innovations and will continue to need them in the future.

For instance, his very first company, Hughes Tool, was instrumental in creating the drilling bits that became the foundation for modern oil exploration. While he was off in Hollywood producing movies in the 1920s and '30s, Hughes still found the time to personally hire and work with the research staff that was constantly churning out patents in oil drilling.

It was Hughes Tool that allowed Hughes to lose millions every year on his movie and stock investments (he was a horrible trader, despite his other successes), because the company was creating $10 million to $30 million annually in cash.

In 1987, Hughes Tool merged with Baker International to become Baker Hughes(BHI - Cramer's Take - Stockpickr), which is now the third-largest oil-services company, behind Schlumberger(SLB - Cramer's Take - Stockpickr) and Halliburton(HAL - Cramer's Take - Stockpickr). The company has benefited immensely from rising oil prices over the past few years but has slid with oil recently.

Baker Hughes (BHI)