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You may have already made some real money in gold and diamonds, Jim Cramer told "Mad Money" viewers Tuesday, but now it's time to make money in mud.
By mud, Cramer is referring to bentonite, and he said that
has the hammerlock on this absorbant clay formed from volcanic ash.
Bentonite is essential to oil-drilling for two reasons, he said, adding that oil-drilling is in bull mode. This is one of the relatively unexploited ways to make money off of the oil-drilling boom, now that everyone knows which oil service stocks and drillers to buy.
First of all, when companies drill for oil the drill bit is cutting up pieces of earth, he said. If the bore is filled with a substance like bentonite, the loose pieces will float to the top and can be discarded.
Second, he said that drilling for oil is a delicate process. Companies must drill through the water table to get to the oil formation below, and they must keep the water from messing up the well. In order to do this, drillers use bentonite to maintain the right level of pressure in the well bore.
Bentonite isn't just used in oil-well drilling he said, noting that it's also used in waste-water filtration. But the bulk of this company's business comes from the oil patch, and Cramer said that Amcol just had a remarkably great quarter.
What company will benefit most from the Bush-Cheney team? Cramer said that, ironically, it's a French company that will reap the rewards now that our politicians have upset nations around the world.
He said he would go to France and buy
, which trades in Paris under the ticker symbol ALO, because he believes it's one of the best infrastructure plays in the world.
The global boom in infrastructure is mostly comprised of power plants and transmission lines, he said, things that the world is spending hundreds of millions of dollars a year to build.
And Alstom should make money on this trend, he said, because it makes turbines, control systems and boilers.
He said that the company is also the world leader in environmental controls, which are mostly needed for coal plants. This is big business, he said, now that coal is bigger than it was in the 1990s.
Of the money spent worldwide on power plant infrastructure, he said that 35% to 40% of that spending goes to building coal plants.
So why do we want a French company? It pays not to be American in this space, he said. Countries, like Russia, that have a beef with the U.S. will turn to French, rather than U.S., infrastructure companies.
Investing With Largesse
"It's time to invest with largesse," Cramer said, referring to government handouts.
When money flows from the U.S. government to private business, it's time to follow the cash, he said, because "big corporations own the government."
He believes that
are the businesses that are getting fat off of government deals. Plus they're cheap stocks in a sector that is on fire.
These two giant defense contractors have gotten "obscene deals" from our politicians, he said.
The Senate has voted to give Northrop $140 billion in loans because its business in Louisiana and Mississippi was harmed by last year's major hurricanes. But Cramer said that Northrop was insured and should get money from its insurers to cover its hurricane-related expenses.
The government's decision to provide a hurricane relief package could also mean that the insurance companies may not have to pay, he said, even though Northrop is expected to pay back its government loan.
As for Lockheed, the company last year was awarded a big satellite surveillance system contract, but the company said it could take longer to build than expected. The government's answer to the problem is to pay even more for stop-gap systems to compensate for the delay, and Cramer said that Lockheed could get these deals, too.
Health Care Prognosis
As with many portfolios, Cramer said, his
ActionAlerts PLUS charitable trust portfolio is seeing its health-care plays struggle.
So he brought in Frank Baldino, chief executive of
, to talk about what can reignite the sector. Cramer owns Cephalon for his charitable trust.
Baldino said that the health-care funk will end because these downtrends are cyclical, but he did not say when he believes the winds will change. He emphasized that his company had great earnings.
Cramer wanted to know why a Food and Drug Administration panel recommended that the agency not approve Cephalon's reformulation of the sleep aid Provigil for use as an attention deficit drug under the brand name Sparlon. The decision will not happen until August.
Baldino said this is just a 90-day delay and that in a post-Vioxx world the FDA needs to be very cautious. However, he said that he is not worried about the approval.
Cramer said that Cephalon is an interesting story, but that he wouldn't recommend it as a buy until he sees whether the August FDA decision is a catalyst.
To view Cramer's interview with Baldino, click here.
Cramer was bullish on
RF Micro Devices
Knight Capital Group
Cramer was bearish on
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At the time of publication, Cramer was long Cephalon.
Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com 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 TheStreet.com, 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 TheStreet.com is related to the specific opinions expressed by him on "Mad Money."
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