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Tuesday, 06/10/08
Posted 06/10/08, 8:43
pm ET |
(Scroll down to see Jim's
comments below) |
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Today's date:
Tuesday, 06/10/08 |
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Dow Jones: |
12,289 |
+ 9 |
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NASDAQ: |
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2,448 |
- 10 |
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S&P 500: |
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1,358 |
- 3 |
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Final Segment
1
Title: |
'Unfiltered
Profits' |
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. . . .
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Featured Stock(s): |
Donaldson Company Inc.
(DCI)
See DCI's official
website
here.
See the Yahoo!
Finance profile for
DCI
here.
See Final Segment 2,
below...
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After this segment, you
can see Jim's
Sudden:Death picks
here... |
JJC:
We talked endless about
the difference between
"old tech"... the Silicon
Valley based companies you
traditionally think of as
tech... and Cramer's "new
tech" companies... "Old
Tech" companies work
tirelessly to build a more
sleek cell phone, or a
more realistic-looking
video game, that will
train your children to be
better felons... But, in
order to be included with
my "new tech" companies,
the industrial companies
that tend to be based in
the rust belt... "new
tech" is about solving
actual problems facing all
of us, around the world...
not just teenagers starved
for new ways to text... or
different versions of
Guitar Hero, with custom
songs built in...
So far, I've generally
focused on big picture,
mankind-saving problems...
and that's renewable
energy, cutting carbon
emissions, ending
famine... but a company
doesn't have to be saving
the world to be a "new
tech" name... It just has
to use technology to
create better ways of
doing things... to offer
other companies... not
just humanity... more
efficient and useful
equipment. In other words,
it can solve other
companies' problems. It
doesn't necessarily have
to solve them itself.
And that's why I am
recommending a company
that reported a beautiful
earnings forecast very
recently... and it has now
had a chance... it's
pulled back...
And that company is...
Donaldson Company Inc.
(DCI).
That's the second-largest
maker of filters in the
world...
. . . .
.
Now, I know you're
thinking... okay, I've got
to change the channel...
filters... I mean, how
could it be more boring...
Listen up! Money... and
particularly making
money... is not boring...
and a stock that's up 71%
since I recommended it a
long time ago, on
September 21st of 2005...
71%... I'd be bored and
rich...
Filters... well Pall
Corp. (PLL),
another manufacturer of
filters, just reported a
great quarter, and the
stock was up 4.7% today.
Sill bored? Oh, and by the
way, not to toot my own
horn or anything, but I
have liked filters on this
show since we started. I
recommended PLL
on January 4th of 2006,
when the stock was
$26.90... a 55% gain... of
course, better than a
sharp stick in the eye...
DCI, which makes filters
for all different kinds of
engines, vehicles in
construction, machinery,
filtration systems... they
collect dust, they remove
impurities from all sorts
of gasses and liquids for
gas turbines... which need
clean air to work
properly. Again, it
doesn't sound all that
sexy. But that's because
we don't think about
filters... they're just
there.
Of course, they're a
necessity for every
industrial or automotive
application. But we've had
filters forever. What
could be new or
interesting about them or
a company that makes them?
That's the mistake that
people who don't
understand the "new tech"
thesis make...
Sure, filters aren't new
like the new iPhone that
came out yesterday,
okay... But that doesn't
mean you can't come up
with new ways to make
better, more efficient
filters that really
matter. You can't just
think a filter is a filter
is a filter... If you do,
DCI is indeed a real
snooze.
But if you embrace the
embrace the idea of "new
tech," you might notice
that this company is a
real leader in this
important technology...
filtration technology. Is
it as important as cell
phone technology?... I say
yes! Is it as important as
video game technology?...
Not even an issue.
You might see that DCI's
products create huge
savings by decreasing
energy consumption, either
by reducing pressure loss
or by determining and
indicating - as many of
DCI's products are
designed to do - the best
time to change the filter
elements for optimal
energy savings.
With oil at $120 (cost per
barrel), this is key
technology...
DCI makes a device called
the "economizer"... that
they put in some of their
compressed air filters. It
uses a microprocessor to
figure out when the filter
elements should be changed
to maximize energy
savings, and then LEDs
signal the user that it's
time to make the switch.
DCI is developing power
core engine filters that
are a third the size of
the current ones, making
this stuff smaller and
lighter... always,
therefore, making it more
energy efficient.
The company also makes
turret dust collectors
that are 50% smaller than
current collectors, and
make it easier to change
filters. DCI is also
developing a liquid filter
that's highly efficient,
and has a longer filter
life than previous
models... it saves energy.
All right... the stuff's
not going to save the
world, but it is designed
to help companies do
better in a higher oil
environment, just like
what we have.
These filters are what the
engine makers and what the
turbine makers are asking
for, because they keep the
dust and gunk out, and let
engines and turbines run
better than ever.
DCI, like many of my "new
tech" companies is a
ROW-er... 55% of its
sales coming from the rest
of the world, which is
important, because the
rest of the world isn't
nearly as slow growth as
we are.
DCI is expanding with new
plants everywhere, from
the Czech Republic to
India to Brazil to
Thailand... When I look at
these great American "new
tech" companies, you would
think that they don't know
anything other than the
United States, and then
you hear where they're
opening, and you say, boy,
our companies are greater
than ever.
Now, it's most recent
quarter was phenomenal.
DCI beat
earnings-per-share
estimates by 6 cents. It
was one of the leading
gainers that day... the
biggest gainer on the New
York Stock Exchange... and
it has since trickled
down, which is our
opportunity.
Its gas turbine filtration
business, to me, seems to
be on fire. Its engine
filtration business is
being driven by
international demand for
construction and mining
equipment. This is a stock
that's tapped into the
global themes we love so
much on Mad Money...
DCI has taken some hits
from truck filter sales,
but the company said
they're seeing a pick up
in orders from last year.
That's going to do it. I
think it signals a bottom
but, albeit, in a pretty
weak market.
I know these stocks aren't
sexy. I know it would be
more fun to come out here
and recommend
Activision (ATVI),
or recommend
NVIDIA (NVDA),
or
Rambus (RMBS),
or
Juniper (JNPR)...
I know those are exciting,
but they don't make you
money.
The Bottom Line!:
I believe that
Donaldson Company Inc.
(DCI),
with its energy-saving
filters, international
growth, and the turnaround
in the weaker North
American truck business is
a terrific buy right here,
especially if you think,
as I do, that energy's not
going to get much cheaper
anytime soon.
. . . .
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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) |
|

|
DCI |
49.65 |
50.40 |
Donaldson Company Inc.
(DCI)
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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: |
'Quiz Cramer'...
General
questions from
the live studio
audience that
were at the show
tonight. |
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. . . .
. |
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Featured
Stock(s): |
See comments below... |
|
|
After this segment, you
can see Jim's
Sudden:Death picks
here... |
. . . .
.
| |
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| |
|
■ |
Stock Snapshots - Includes
all stocks mentioned above |
■ |
|
| |
|
|
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) |
|
 |
na |
na |
na |
Question from
the live studio
audience:
Q:
How do you
relax?
JJC:
I don't relax
during the week.
I just don't.
Monday through
Friday is just
work.
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