Cramer noted that only 24% of all hospitals outsource their laundry and linen services, and long-term care facilities outsource even less. This leaves a huge opportunity for growth for Health Care Services. Indeed, the company grew earnings at a 16% clip during its last quarter.
But even more exciting is HCS's dining services, a segment that delivered 50% growth in the quarter.
So why is such a rock-solid business a speculative stock? In a word, valuation. The company currently trades at 26.6 times earnings and has only an 18% growth rate. Cramer said that's higher than he would like, but feels in this case, the company is delivering on its promises and deserves its multiple.
In the "Executive Decision" segment, Cramer welcomed Tim Conver, chairman and CEO of AeroVironment (AVAV), makers of unmanned drone aircraft and electric-vehicle charging stations.Shares of AeroVironment are down 20% of the year on uncertainty about next year's defense budget. AeroVironment currently has 75% market share in the military's unmanned drone arsenal. Conver said the military budget picture is a murky one, but added that the vast majority of his company's products are small, inexpensive drones that cost far less than the alternatives and save lives. He said these products are easy to support politically and hard to deny. Conver said AeroVironment is in a "good position" even with the political headwinds. Conver also detailed some of his company's newer innovations, such as the switchblade missile. He said soldiers from the field have reported being pinned down by snipers or mortars and having to wait hours for air support to arrive. However, AeroVironment's new winged drones can fit into a backpack and be quickly launched to identify targets. Turning to the company's other business, electric-vehicle charging stations, Conver said AeroVironment is meeting the needs of auto companies, consumers and public projects by offering a complete array of hardware, software, installation and support services. He said the business is growing and the government's free promotions will end eventually, adding to his company's bottom line. Cramer said he's not worried about the military budget, as AeroVironment is on the cutting edge of what our troops need to succeed.
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