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Cramer's 'Mad Money' Recap: Port-Tending Big Business

The future looks bright for OSI Systems thanks to its port security technology. Plus, Altria and Vornado.

Click here for an archive of Cramer's "Mad Money" recaps.

When Jim Cramer reads about senators in a huff over port security, he thinks it's time to own

OSI Systems

(OSIS) - Get OSI Systems, Inc. Report

, he told viewers of his "Mad Money" TV show Thursday.

Maybe you've never heard of this U.S. company, but Cramer said that it could be a great name in the homeland security space, along with such others as


(RTN) - Get Raytheon Company Report


L-3 Communications

(LLL) - Get JX Luxventure Limited Report


Viisage Technology



FLIR Systems

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TheStreet Recommends

(FLIR) - Get FLIR Systems, Inc. Report


Hidden beneath its health-care business, OSI Systems has the technology to make our ports safe, he said, since it offers systems under the Rapiscan Systems brand that can inspect anything, including baggage, cargo, people and vehicles.

"The real juice is in its security business," Cramer said. "This is where I think all the upside is going to come from."

He added that the Congressional Budget Office has earmarked funds for equipment purchases in security, and he thinks a lot of this will go to OSI.

The company has a baggage screening product called the HBS System, and is working on a PFNA system, which stands for Pulse Fast Neutron Analysis, that bounces neutrons off large containers to find out if their contents are safe, he said.

There are still bugs, but when this is perfected it will be used everywhere, Cramer said.

OSI is doing $60 million in its security business, and he said that number could balloon on contracts and government orders.

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As far as its Spacelabs Healthcare unit is concerned, OSI owns it at practically book value, Cramer said. It's doing $200 million a year in health care revenue, and has a $350 million market capitalization. The unit has 40% operating margins and is resistant to a slowdown in the economy, he added.

OSI is losing money, he warned, but that's because it's spending so much on research and development.

"Ignore the losses in the near term," he said, because this should be big money in the long term.

Smoke-Free, Except for the Portfolio

U.S. cigarette consumption has hit its lowest level since 1951, but Cramer still believes there's money to be made in


(MO) - Get Altria Group Inc Report

, which he owns for his

ActionAlerts PLUS charitable trust.

The current population is twice as high as it was 54 years ago, he pointed out, and there are trends that are responsible for the downturn in smoking that are good for the parent company of Philip Morris.

Since cigarette advertising is largely banned, it is nearly impossible to introduce new brands now.

And even though smoking is no longer considered acceptable in most public places, even outside, tobacco is addictive and there will be smokers to buy the product.

But the real good news for Altria is the fact that the amount tobacco companies must pay as part of the 1998 big tobacco lawsuits is now set to decrease, Cramer said; and this will lead to better-than expected earnings.

Smoking is also becoming more restricted in Europe, but Cramer told a caller that the key is that lax smoking regulation in Asia will offset falling smoking rates elsewhere.

Rising Rents, Rising Stocks


NY Post

reported that office space prices should double in New York City over the next five years because there isn't enough supply to keep pace with demand.

While this is bad news for renters and lessees, it's good news for office real estate investment trusts, and the REIT that Cramer likes the best is

Vornado Realty Trust

(VNO) - Get Vornado Realty Trust Report

, which owns a large portfolio of real estate in New York.

He said that it has a "best of breed" management team, led by CEO Steve Roth, and that when it soon renews several leases in New York, it will do so at much higher prices.

There has also been a lot of consolidation in the group, and people feel that REITs are a perfect hedge against inflation, he said, adding that he recommends owning Vornado before it gets to $100. It closed Thursday up 40 cents at $92.55.

Rock of Gibraltar

Gibraltar Industries

(ROCK) - Get Gibraltar Industries, Inc. Report

CEO Brian Lipke joined Cramer to explain why the steel company is doing well, despite its exposure to the troubled auto market.

Gibraltar found a niche where it was able to establish product leadership position, Lipke said. And he added that a recent acquisition will also allow the Buffalo, N.Y.-based company to gain new exposure to the industrial building products market.

Lightning Round

Cramer was bullish on

Vitesse Semiconductor



Sara Lee






UnitedHealth Group

(UNH) - Get UnitedHealth Group Incorporated Report


Applied Micro Circuits




(CMI) - Get Cummins Inc. Report



(PCAR) - Get PACCAR Inc Report






(ACN) - Get Accenture Plc Class A Report



(RIG) - Get Transocean Ltd. Report



(HAL) - Get Halliburton Company Report


Eagle Materials

(EXP) - Get Eagle Materials Inc. Report


Seagate Technology

(STX) - Get Seagate Technology Holdings PLC Report



(PEP) - Get PepsiCo, Inc. Report


Hansen Natural



Crystallex International



Sirna Therapeutics



Electronic Data Systems



Cramer was bearish on

XTO Energy



Archer Daniels Midland

(ADM) - Get Archer-Daniels-Midland Company Report


Research In Motion



Krispy Kreme



Shanda Interactive



Sirenza Microdevices



Lexar Media



Pepsi Bottling Group



For more of Cramer's insights during the latest Lightning Round, click here.

Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by

clicking here


At the time of publication, Cramer was long Altria, Halliburton and UnitedHealth Group.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or is related to the specific opinions expressed by him on "Mad Money."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.