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Monday, 05/12/08
Posted 05/12/08, 7:47
pm ET |
(Scroll down to see Jim's
comments below) |
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Today's date:
Monday, 05/12/08 |
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Dow Jones: |
12,876 |
+ 130 |
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NASDAQ: |
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2,488 |
+
42 |
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S&P 500: |
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1,403 |
+ 15 |
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Opening Segment 1
Title: |
'Glass Works'
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. . . .
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Featured Stock(s): |
Owens Corning (OC)
See OC's official
website
here.
See the Yahoo!
Finance profile for
OC
here.
See Opening Segment 2,
below...
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After this segment, you
can see Jim's
SUDDEN:DEATH picks
here >>
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JJC: John
McCain just gave a
long-winded, detailed
speech at a Vestas
factory... in Oregon
today. Vestas makes
windmills... Let me tell
you, if you think McCain
will wind, just stick to
the bet on oil - not wind
- as a presidential
play... although wind -
the cheapest form of
renewable energy - should
still be a great
business...
And, remember, this is the
year of natural gas... I'm
predicting that 2009 will
be the year of wind...
And that's why I'm
recommending Owens
Corning (OC)...
a stealth green play
that's got both a wind
angle, and a green
building angle... as in
helping buildings conserve
energy... something that
must stay on our radar
screen with oil up to
$120... and seemingly,
inexplicably heading to
$150, which has been my
new price target...
You may know OC as the
Pink Panther, its
trademark... In fact,
though, Pink Panther as a
hallmark for insulation,
is only part of the
animation, because OC is
multi-faceted...
Besides insulation, the
Toledo-based OC makes
shingles and asphalt...
Most important, it makes
glass fiber composites...
Now this company's largest
business is 33% of
revenues, and its most
international, getting 61%
from the rest of the
world. This is the key
business...
The glass fiber composites
business takes glass
fibers, and combines them
with other materials, to
make strong, durable,
light and flexible
material, that's intended
to replace steel, wood,
concrete, aluminum... and
other stuff that's just
not as strong as this...
This is the business that
makes the composite fabric
for wind energy... where
the CEO told us, on last
week's conference call...
I want you to
go listen to it,
before you go buy... The
wind energy market, where
we have a very, very
strong market position...
both in our fabrics
business, as well as our
glass making business...
has been a real star on a
year-to-date basis, and we
think it is a real star
going forward...
Ladies and gentleman, you
have no idea how important
that the tensile strength
of this company's products
are to the new wind
turbines... Do you know
that these wind turbines
have wingspans as big as
Boeing 747s... You see,
they're not just like
little Dutch Boy
windmills...
That weight... requires
materials that have
unique, Herculean strength
and only OC has the
solution!...
Do you know that the
Department of Energy just
came out today... and said
that wind power could
provide 20% of our power
by 2030... Hey, that's not
that peak power... that's
baseline power... They're
saying that there's $43
billion that's going to be
invested in wind.
When you think of wind, I
need you to think OC... OC
will be getting a ton of
money from that. Think of
OC as kind of like railcar
maker,
Trinity Industries Inc. (TRN)...
which was also a stealth
play on wind, and which
blew away the numbers,
when it reported shortly
after I recommended it,
thanks to the wind
business...
Picture this company not
as it is with just this
guy (the Pink Panther),
okay... I want you to
picture it as it could be,
because I firmly believe
that the $150 million in
glass fiber that they sold
to the wind market in 2007
- 10% of their sales for
that division - is going
to get a whole lot
bigger...
The OC expects the wind
business to grow at a 16%
clip year-over-year for
the next decade. The whole
global composites market,
more generally, is
estimated to be about $56
billion, and demand for
these composites should be
growing at about 5% per
year... And, ever since OC
pants-ed Sanco Ban, by buying the reinforcements and
composites business from
them, it's been the
largest company in this
space.
You know... again... "new
tech" right?... What about
the rest of the
company?...
The glass fiber insulation
business... green.
Insulation saves 48% of
the energy in homes, 30%
in commercial buildings.
You probably don't know
this, but it's buildings,
not cars, that are
responsible for most of
our energy use - about 40%
- and it's really
profligate energy, when
you think about it,
because we have a simple
OC solution...
Now, the weakness of OC -
40% of its sales - still
come from new U.S.
housing... Still, that
business has stayed
profitable... Isn't that
amazing? The roofing
business, on the other
hand, isn't. But this
company is trying to
change from a cyclical
building stock, to a
global, "new technology"
company, through its
composites business. I
think it's going to
succeed.
Now, I would be worried
more about the housing
component at OC, if it
hadn't just reported its
second good quarter in a
row last week, beating
earnings per share by 5
cents. The company's
operating income only
declined by $5 million,
despite all this, okay...
The stock is supposedly
extremely levered to U.S.
construction. They see
that. The residence
construction? They're
getting out... well,
they're making it minimal,
by doing so many other
things...
OC beat, because it's no
longer just a residential
company. Its composites
business grew sales by -
get this - 82%...
Operating profits by
156%... The entire company
is now roughly 43% rest of
the world... It used to be
12% in 2006. Can you
imagine that? That's rapid
adaptation... They saw
this coming, ladies and
gentleman... they saw this
housing debacle coming.
This stock is a win, even
with housing in the dumps.
If housing bottoms, man, I
think it goes right
through the roof
shingles...
. . . .
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The Bottom Line!:
Owens Corning (OC)
is transforming itself
from this guy only (i.e.,
the Pink Panther, used in
their pink fiberglass
insulation branding and
commercials), to a "new
tech" play on composite
materials. With the 2009
year... fabulous wind
coming... the wind power
kicker, I think, takes the
OC right to where... right
here, I'm saying it can go
to $30! The new OC is
alive and well, and I
think should be bought
right here!
. . . .
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■ |
Stock Snapshots - Includes
all stocks mentioned above |
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Jim
Cramer's
rating on
this stock |
STOCK
SYMBOL |
Closing
price
that
day |
Opening
price
next
day |
Full Company
Name/Comments
(see comments above for
each) |
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OC |
24.74 |
na |
Owens Corning (OC)
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See all of tonight's stocks'
latest quotes on
Yahoo! Finance |
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Most popular
investing books ordered:
(click any book to see at
Amazon.com) |
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Final Segment
2 Title: |
'Mad Mail'... |
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. . . .
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Featured
Stock(s): |
See comments below... |
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|
After this segment, you
can see Jim's
Sudden:Death picks
here... |
. . . .
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■ |
Stock Snapshots - Includes
all stocks mentioned above |
■ |
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|
Jim
Cramer's
rating on
this stock |
STOCK
SYMBOL |
Closing
price
that
day |
Opening
price
next
day |
Full Company
Name/Comments
(see comments above for
each) |
|
 |
HOG |
39.03 |
na |
Mad Mail
Harley-Davidson, Inc.
(HOG)
Q:
A while
back, you told
someone you
didn't want to
buy HOG, you
wanted to buy a
Harley... I
already had the
idea... I bought
the bike in
January and
immediately
registered it
with "booya" as
the plate.
JJC:
You made the
right move. HOG,
the stock, has
done nothing...
The guys in my
neighborhood,
who own the
Harleys, are
doing the best,
not the guys who
own the stock.
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AGN |
52.78 |
na |
Mad Mail
Allergan Inc. (AGN)
Q:
Should I
invest in AGN?
JJC:
I do like AGN at
$52...
Price target to
buy AGN:
$52.00
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FRO |
61.23 |
na |
Mad Mail
Frontline Ltd. (FRO)
Q:
I have
read, and heard
several
observations,
that shipping is
having a problem
because of a
shortage of
containers. Is
there a play
here?
JJC:
There is...
there are
actually a bunch
of them,
frankly... But,
remember, of the
ships that we're
recommending,
we're
recommending FRO
and Nordic American Tanker (NAT)...
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NAT |
40.08 |
na |
Mad Mail
Nordic American Tanker (NAT)
See FRO comments
above for:
NAT
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