But Cramer said Generac is now too expensive, which is why he likes Briggs & Stratton ( BGG), a maker of engines for generators as well as for a majority of lawn and garden equipment. Cramer said Briggs is far from a pure play on generators because the company only derives 10% of its sales from them, but it does have many other factors pulling in its favor. He said the company reported a disappointing quarter on Oct. 18, in part from this season's drought, which curtailed many lawn and garden projects. But with the turn in housing at hand, Cramer said now might be bottom for the company. Most lawn and garden equipment gets replaced every seven to eight years, he added, and with the peak in 2005, that replacement cycle should just be getting underway. Additionally, new environmental standards kick into effect Jan. 1, requiring outdoor engines meet tougher emission standards. That will do away with a lot of cheaper competition as only better engines will make the grade. Briggs & Stratton has 40 new products hitting store shelves next year and has been aggressively cutting costs. It also sports a 2.5% dividend yield.
Driving the Market
The U.S. rental car market is back, Cramer told viewers. That's why Hertz ( HTZ) is up 26% for the year while Avis Thrifty ( CAR) has risen by 62%. Consolidation has been key in this industry, said Cramer, which is why there are now only four major players left standing. Of the four, Cramer said Enterprise, the largest among them, is currently private, which leaves Hertz, Avis and ZipCar ( ZIP) as investable options. He said ZipCar remains a novel concept but unfortunately has nothing proprietary, which is why the company's stock has done nothing but fall since its initial public offering. Both Hertz and Avis are cheap, said Cramer, trading at 7.2 times earnings for Hertz and 9.6 times earnings for Avis. But Cramer said that Hertz is the best thanks to the company's acquisition of Dollar Thrifty ( DTG). Cramer said the Dollar Thrifty deal will give Hertz 10,000 locations in the U.S. and afford it 30% market share. The deal will also minimize the company's ailing European division, which currently accounts for 18% of sales.