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You haven't missed the ethanol train, Jim Cramer told "Mad Money" viewers Monday, even though the word is out that it's the fuel of the future.
Even Democrats and Republicans "are in total agreement on this issue," he said.
Previously, Cramer had recommended
Archer Daniels Midland
, which reported a blowout quarter.
So what's left? Cramer said to take a look at
It thinks that it's a food company, but its food division is not making any money, he said. The potential lies in ethanol. MGPl uses corn and processes it into ethanol -- it blends the corn with residual starch from the company's wheat protein and starch-processing operations.
The company's last quarter was very bad because it was crushed by natural gas prices. And Cramer added that Wall Street was very critical of the fact that the company considers its loss-making division its main business and its ethanol division a side project.
But natural gas prices have fallen through the floor, and ethanol demand has boosted the company's bottom line, Cramer said.
Plus, he said that the ethanol industry sets new production records every month and that the higher demand should continue.
"Some commodities have pander power ... meaning they have so much political appeal that politicians will keep plugging them no matter how economically unsound the idea may be," Cramer said.
And he said that ethanol is "the king of pander power," with environmentalists who hate fossil fuels and Republicans from states that grow corn and wheat both supporting its production and use.
Only oilmen don't like ethanol, said Cramer. And with this much pander power he said that there needs to be some ethanol pin action.
Getting ethanol from the plants that process it to gas stations where it's needed is difficult because it is too corrosive to be sent via pipeline, he said.
That's why he believes that rail company
is the play on ethanol shipping bottlenecks.
The company raised guidance and still beat expectations, plus it ships a lot of coal, he said.
Between coal and ethanol, "the rails are the new energy play," Cramer said.
He said that the company has bought more fuel-efficient trains to cut down on energy costs and levies a fuel surcharge that is making it some more money.
Burlington Northern Santa Fe
( BNI) is a rail company with similar exposure to coal and ethanol, he said that Union Pacific is the best-of-breed choice.
And if high energy costs are here to stay, Cramer said that
is the auto company that is the best play on hybrid technology.
Good News Bears
Archer Daniels Midland reports earnings tomorrow; and Cramer said that if other high-flying stocks are any indication, ADM will fall after reporting earnings.
We saw this happen to companies including
, he said, because these stocks were up so much ahead of earnings that people took profits on the good news.
"If you waited until a day after any of these stocks reported, you would have found a great entry point," he said. "Let ADM report ... let them be taken to the woodshed and then buy the stock when it's cheap."
Archer Daniels Midland is one of the largest agricultural processors in the world, turning corn, soy and wheat into things that we can use. And Cramer said that this includes ethanol, making it a great play on this "pander power" commodity.
But the company is up so much, that even on a pullback there needs to be some compelling arguments to make it a buy. Cramer gave viewers three reasons to buy ADM after the stock comes in.
"This is a government of, by and for the corporation," he said, referring to the fact that government protection will work in ADM's favor. There is a 50-cent tariff on Brazilian ethanol that will not be waived even though we need ethanol, he said.
This is to protect American farmers, and it's great for ADM, he added.
Plus, only Archer Daniels Midland is in league with Iowa corn growers; and Iowa is the most important state in the presidential primaries, he said.
Finally, the company just hired Patricia Woertz as its new president and chief executive. Woertz used to work at
, where she was the highest-ranking woman in the oil industry.
To survive, ADM will need to become a political energy company able to persuade auto companies to install flex engines and gas stations to offer ethanol at the pumps, he said. And Cramer believes that Woertz has experience in this type of environment.
'Comeback Player of the Year'
After a poor quarter, it seems that
( ASD) has turned the company around in an unbelievably short period of time, Cramer said. Cramer welcomed CEO Fred Poses to discuss his company's quick recovery, a turnaround that's prompted Cramer to label the stock Comeback Player of the Year.
American Standard is a fundamentally strong business, Poses said, which allowed it to bounce back from a hard quarter, post great growth in the first-quarter and see continued strength in its air-conditioning business.
He added that his company took a beating because its bath and kitchen business had a tough second half of the year in 2005. American Standard understands many of its mistakes in that unit and has made positive changes, Poses added.
The company is one of the largest buyers of zinc, copper and aluminum -- the prices of which are soaring. Cramer asked how American Standard managed to make its quarter, given that raw costs have gone up so much.
Poses said that the move has been delayed but that his company and the industry as a whole have begun to pass costs on to consumers.
To view Cramer's interview with Poses, click here.
Cramer was bullish on
Chartered Semiconductor Manufacturing
Cramer was bearish on
For more of Cramer's insights during the most recent Lightning Round, click here.
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