Cramer's 'Mad Money' Recap: Trinity's Hidden Treat
Click here for an archive of Cramer's "Mad Money" recaps.
"We are big believers in wind power," Jim Cramer told viewers of his "Mad Money" TV show Thursday. He explained that wind power is a fabulous source of green energy. But when it comes to wind power stocks, all of the best companies are often buried within other companies.
That's why when a caller asked about railcar maker
Trinity Industries
(TRN) - Get Report
in Wednesday night's lightning round, Cramer said "sell, sell, sell." But upon closer examination, Cramer discovered that Trinity is also the largest manufacturer of wind towers.
Cramer compared Trinity to
Apple
(AAPL) - Get Report
circa 2002, when most investors saw the company as merely a computer maker and totally ignored the hidden potential in the company's now ubiquitous iPod.
Cramer: Make Money off the Energy Sell-Off |
var config = new Array(); config<BRACKET>"videoId"</BRACKET> = 1519803064; config<BRACKET>"playerTag"</BRACKET> = "TSCM Embedded Video Player"; config<BRACKET>"autoStart"</BRACKET> = false; config<BRACKET>"preloadBackColor"</BRACKET> = "#FFFFFF"; config<BRACKET>"useOverlayMenu"</BRACKET> = "false"; config<BRACKET>"width"</BRACKET> = 265; config<BRACKET>"height"</BRACKET> = 255; config<BRACKET>"playerId"</BRACKET> = 1243645856; createExperience(config, 8); |
Trinity, it turns out, has a growing wind power business with a $750 million backlog. And while wind power only accounts for 6% of the company's sales, Cramer expects that percentage to increase to 10% by next year. Trinity is currently building a second wind tower factory in Mexico to help meet its growing demand.
At just eight times its earnings, and down 41% from its recent highs, Cramer called Trinity's stock a steal, and recommended investors jump in now, ahead of what he expects to be one more difficult quarter for the company. "The wind story is here," said Cramer.
A Mighty Wind
Continuing on his wind energy theme, Cramer also recommended
Otter Tail
(OTTR) - Get Report
, a company with a funny name, but also one with another hidden wind power business.
According to Cramer, Otter Tail's wind power division, DMI Industries, is "on fire." DMI accounted for 27 cents a share of the company's most recent earnings, up 42% from just 19 cents in 2006. Cramer said this 63% growth is hard to find in any industry.
Cramer speculated that if Otter Tail were to spin off its DMI division the stock could double in value. DMI, he said, has a solid $289 million backlog and an 18% market share. The company is also expanding its three plants in Canada to help meet its growing demand.
Cramer called Otter Tail "the best play for wind power out there," and encouraged the company's management to bring DMI to the forefront of their earnings calls. He called the strong a strong buy under $37 a share.
Sell Block
Cramer put himself in this week's "Sell Block" for not recommending
Covanta
(CVA) - Get Report
to viewers earlier in the year. "Missing big gains is a sin," he told viewers. "I deserve to be punished for missing this move," he continued.
Covanta is the country's largest waste energy company, and converts 15 million tons of solid waste into energy every year at its 32 facilities nationwide. The company commands a 50% market share and just recently announced its second partnership in China.
Cramer explained that he neglected to recommend Covanta because of Sam Zell's purchase of the company out of bankruptcy back in 2003. "I wasn't a fan of Zell," he explained. But given the company's 3.3% pullback today, he said Covanta's prospects make the company just too compelling to pass up.
Give Nucor a Nod
Cramer welcomed Dan Dimicco, chairman, president and CEO of
Nucor
(NUE) - Get Report
to the show to discuss the company's outlook.
Dimicco explained that his company reported record first-quarter earnings and the supply and demand equation is in perfect balance. He explained that the combination of a weak dollar, fewer Chinese exports, and increased global supply is keeping the steel business in bull market mode.
Cramer said Nucor is a great stock with consistent earnings, and while he still likes
US Steel
(X) - Get Report
, Nucor is worth owning.
Sudden Death
In Sudden Death, Cramer was bullish on
Corning
(GLW) - Get Report
and
Dynegy
(DYN)
.
Cramer was bearish on
Incyte Corporation
(INCY) - Get Report
.
Lightning Round
In the Lightning Round, Cramer was bullish on
Nike
(NKE) - Get Report
,
Salesforce.com
(CRM) - Get Report
,
Companhia Siderurgica Nacional
(SID) - Get Report
,
Honeywell
(HON) - Get Report
,
CPFL Energia
(CPL) - Get Report
and
ABB Ltd
(ABB) - Get Report
.
Cramer was bearish on
Under Armour
(UA) - Get Report
,
Crocs
(CROX) - Get Report
and
NetSuite
(N)
.
Want more Cramer? Check out Jim's rules and commandments for investing by
.
For more of Cramer's insights during the Lightning Round, click here
.
At the time of publication, Cramer was long Corning.
Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for
Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. Click
here to order Cramer's latest book, "Mad Money: Watch TV, Get Rich," click
here to order his book, "Real Money: Sane Investing in an Insane World," click
here to get his second book, "You Got Screwed!" and click
here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by
clicking here.
TheStreet.com has a revenue-sharing relationship with Traders' Library under which it receives a portion of the revenue from Traders' Library purchases by customers directed there from TheStreet.com.