NEW YORK (Real Money) --There are an awful lot of industrials that trade as if there could be something really, really wrong out there. For every Honeywell (HON) or 3M (MMM) there is a company like US Steel (X) or Arch Coal (ACI). For every United Tech (UTX) or Boeing (BA) there is a name like Alcoa (AA) or an Alpha Natural (ANR).
Now, I know that the weak ones have challenges with their balance sheets. I also know that steel is glutted. But if you listen to Alcoa CEO Klaus Kleinfeld, aluminum is coming into a tighter supply-demand picture, and steels been glutted almost the whole time that U.S. Steel has been coming down. Coal? It could be entirely secular in its decline, but the Chinese and Indians have not stopped building plants and they are importing the stuff like mad. Walter Energy (WLT) wasn't negative on coal on that quarter Thursday.
What surprises me is that there isn't ever any buy interest in these names. You would think that you could get a basket going of down-and-outers here, betting that the world could reignite at some point. U.S. Steel is not a worthless company by any means, even if it has real balance-sheet issues. Alcoa just said it doesn't need to raise equity. Alpha Natural did trade to $103 in 2008. Arch has a hideous balance sheet, but it does have lots of revenue. Who says there couldn't be an uptick in steel now that the U.S. is beginning to build refineries and chemical plants and pipelines all throughout the country? The demand for commercial real estate won't stay at nil forever.
Editor's Note: This article was originally published on Real Money on April 12. To see Jim Cramer's latest commentary as it's published, sign up for a free trial of Real Money.Where is it written that these companies simply must disappear because they make a product for which there had been huge demand even five years ago? I am not recommending any of these, but I do think Alcoa will be a buy at some point. This is not the same company that was at $44 in 2008. It is a much better one. China, in the meantime, can only support those dirty smelters for so long. U.S. Steel? If the other guys go under, it will be the last man standing. Alpha? Arch? You would think that someone might want to consolidate this business who believes that it isn't in terminal decline.
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