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NEW YORK (
) -- "Don't count America out as a manufacturing nation," Jim Cramer told his
TV viewers, on a special episode dedicated to celebrating the best of the best of what the U.S. has to offer in the manufacturing sector.
"We make the best stuff on earth," said Cramer, borrowing a line from Snapple's recent TV spots. He said the U.S. is full of best-of-breed companies pumping out great products that are second to none. Cramer told investors to write down all of the stocks he mentions tonight, and buy them on any weakness.
, a stock which Cramer owns for his charitable trust,
Action Alerts PLUS. Cramer said Caterpillar is the largest manufacturer of construction and mining machinery in the world, and thanks to the company's recent acquisition of
, the company will have an even bigger foothold in mining, especially in coal mining.
Cramer said Caterpillar may be based in Peoria, IL, but the company is truly a global business, with only 35% of sales coming from the U.S. He said Caterpillar makes money from both emerging and developed nations. Caterpillar is estimated to earn between $8 to $12 a share in 2012, has a 20% long-term growth rate and a decent dividend to boot.
Second on Cramer's list,
, the world's largest maker of agricultural equipment. Cramer said Deere may get 60% of its sales from U.S., but demand for the company's products is stemming from a global bull market in agriculture, with developing nations around the world clamoring for more basic food necessities.
Cramer said Deere is simply one of the best run manufacturers ever.
Ford's Incredible Turnaround
Continuing his list of the greatest American manufacturers, Cramer featured
, and the company's dynamic CEO Alan Mullaly, who engineered one of the most incredible turnarounds in U.S. corporate history.
Cramer reminded viewers that Ford didn't need government bailout money, nor did the company go bankrupt. He said Mullaly took swift action, cleaned up the company's balance sheet and took market share while the rest of the industry crumbled. That's why the stock doubled in the 18 months that followed Cramer's Dec 2008 recommendation of Ford.
Cramer said Ford is now a leaner, meaner and more profitable auto company. The company is also making better cars, like the Ford Fusion, and is improving fuel efficiency across all its models and brands. Mullaly has further pledged to reduce Ford's bloated capacity by another 40% in 2011.
But as much as Ford is a car story, Cramer said the company's remarkable turnaround is also a financial story. He said Ford now makes more money with every car it produces, and with that improved cash flow, the company is paying down debt and thus improving its credit rating, which in turn further strengthens the company.
"Nobody does it better than Ford and Mullaly," he said.
Trades for the Next Recovery
"Don't miss out on the next economic up-cycle," Jim told viewers, as he recommended two more great American manufacturers,
Cramer said now is the time to play the next recovery. He said in the first two years of the last two recoveries, the stocks of 3M and Emerson outperformed the averages by a hefty 23%. He said both companies profit from early stage recoveries because they're well diversified between early-, mid- and late-stage businesses.
He said both Emerson and 3M are high quality franchises and serious international players. In the case of 3M, nearly 32% of the company's business is derived from emerging markets. 3M is also one of the most innovative companies around, with 6% of company sales devoted to research and development.
Emerson is another innovation juggernaut, said Cramer. This maker of parts and tools has its hands in everything from industrial automation to climate control technologies. Like 3M, Emerson also invests heavily into research and development. Emerson also has a solid dividend and a track record of boosting that dividend every year for the past 53 years.
Next up on Cramer's best seller list of manufacturers, the chemical stocks. He said with so much equipment, machinery and other goods being produced, the chemical coatings business alone could become as large as $110 billion by 2013. That bodes well for best of breed chemical companies
Cramer said DuPont delivers a double helping of bull market, thanks to the company's leading position in the agriculture space. DuPont now derives 30% of its sales from things like genetically modified seeds and crop chemicals that protect our food from weeds, insects and disease.
DuPont's other business, performance chemicals, is also on fire, said Cramer. DuPont delivers everything from Teflon to performance polymers for the automotive and aerospace industries, as well as chemicals for electronics, oil service and consumer goods.
Cramer said DuPont is a global brand, with 59% of sales outside the U.S., adding the company has a solid 3.5% dividend yield.
When it comes to PPG, Cramer said this company is no longer just about plate glass, which now makes up just 7% of the company's business. PPG is all about coatings and is the No. 2 player in that business. Coatings makes up 74% of PPG sales, with 55% of those stemming from overseas.
Cramer said PPG is well-positioned to take advantage of the automotive bull market, and has a great dividend and a 39 year track record of dividend hikes.
More Manufacturing Giants
Cramer's final two picks for his manufacturing hall of fame were diversified industrial giant
, another Action Alerts PLUS name, and aerospace giant
Cramer said Honeywell has great management across all of its many businesses from aerospace and autos to climate control and security products. He said CEO Dave Cote has done a fabulous job of cutting costs and focusing on profitability while still spending on research and development and preserving the great Honeywell culture.
Cramer said unlike some conglomerates, Honeywell's mix of business all work together to form a better company with a better stock, similar to that of 3M and Emerson. The company gets 55% of sales from early stage businesses that do well at the beginning of a recovery. Cramer said Honeywell will also benefit from the coming boom in aerospace.
And speaking of aerospace, Cramer said nobody does aerospace better than Boeing, another Action Alerts PLUS stock. Cramer said the stock of Boeing has been under siege as the company's new 787 Dreamliner has been riddled with delays and problems. But with aerospace cycles lasting on average seven years, and a new cycle just beginning now, Cramer said Boeing will have many years of great growth ahead of it.
Cramer said he'd be a buyer of any of the stocks he mentioned tonight on any weakness. He said the cheaper investors can get into these names, the more money they'll make. He told them never to chase any of these stocks higher. He said investors should simply wait for the next 3% to 5% market correction before buying them.
--Written by Scott Rutt in Washington, D.C.
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At the time of publication, Cramer was long Caterpillar, Honeywell, Boeing.
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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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 TheStreet.com. 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 TheStreet.com, 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.