In the "Executive Decision" segment, Cramer spoke with Sandy Cutler, chairman and CEO of Eaton (ETN), a company leading the way in power management solutions. The stock has doubled since Cramer first recommended Eaton on Oct. 22, 2008.
Cutler called power management one of the bankable mega trends for the coming years as the price of energy gets more and more expensive. He said Eaton has terrific leverage in helping its customers use less energy and use it more safely. That's why the company was able to deliver sales growth of 16% and was able to boost its dividend by 16%.
When asked about sales Europe, Cutler said the old metaphor of comparing eastern Europe to western Europe no longer applies. Instead, he said, it's more accurate to compare northern Europe, which is stronger with its ability to export more thanks to a weaker euro, to southern Europe, where the countries are considerably weaker. But no matter how to divide the continent, he said, there is still growth to be found.Cutler said two other bright spots for the company are its datacenter business, where Eaton helps prevent energy waste, and trucking, which will be a strong propellant for growth. While Cutler conceded that this recovery is a lot slower than any other since World War II, he said there are still hot segments out there, and Eaton has found them. Cramer agreed, calling the company's quarterly results "the greatest industrial quarter I've ever seen."
King of Virtualization SoftwareInvestors looking for the company with the best earnings for the quarter need look no further than virtualization software maker VMware (VMW), Cramer said. He said VMware posted the best earnings of any company he follows, which is why its stock is flirting with its 52-week high. Cramer said VMware is the leader in virtualization software, which can save businesses 50% to 70% on their IT budgets. He said the company posted blowout numbers, with revenues up 48%, net income up 125% and better-than-expected margins. What's more, Cramer said VMware did what all high growth stocks must do, they beat the "street high" estimate from the analyst with the highest expectations for the company. Cramer said VMware even scored high on his proprietary "congrats index," a measure of how many analysts offer management congratulations on their outstanding quarter. For those interested, VMware scored five "congrats" out of 13 analysts for a score of 38%. Cramer said VMware still has plenty of room to grow, with only 42% of all servers running virtualization software. The company is expanding from large businesses, into medium and smaller businesses, as well as expanding deals with giants Salesforce.com (CRM) and Google (GOOG). Cramer said another way to play VMware is with EMC (EMC), an Action Alerts PLUS stock, which does not get nearly enough credit for its $26 billion stake in VMware. "This stock is a buy," said Cramer.
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