Friday, 05/02/08
Posted 05/03/08,  5:17 pm ET

(Scroll down to see Jim's comments below)

 
 
Today's date:  Friday, 05/02/08

  Dow Jones: 13,058   + 48
  NASDAQ:   2,477    -  3
  S&P 500:   1,414    + 4
 
 
 
 
 
First Segment
 
 
Opening Segment 1 Title: 'Dover - looked?'

.  .  .  .  .

Featured Stock(s): Dover Corp. (DOV)

See DOV's official website here.

See the Yahoo! Finance profile for DOV here.



See Opening Segment 2, below...
 
After this segment, you can see Jim's Lightning Round picks here...


JJC:   At the beginning of the week, I wanted to do a series about how America has once again become the greatest manufacturing agent in the world. I wanted to highlight the very best of our manufacturing companies...the one's that are exporting like mad thanks to the cheap dollar and cheap labor force, as well as our deep technological know-how. 

But early on, I realized that these companies are actually the big tech companies, not manufacturing companies. They are the ones with the potential to do the real innovation, the real growth...

And the stocks we still think of as tech, the companies that are bidding for Yahoo! (YHOO) or the companies that are making the four hundred millionth better PC... they are shadows of their former selves...

The new techs are more focused on solving the problems of the day:  saving, creating new sources of energy, solving crucial emissions problems... not designing new versions of Grand Theft Auto, or customer retention programs... 

Yet these vital innovative growth stocks sell more cheaply than the activist, recidivist old techies, and it makes no sense at all...

We have talked about five of these new tech stocks: Eaton Corp. (ETN), Parker Hannifin (PH), Harsco Corp. (HSC), Bucyrus (BUCY), Joy Global (JOYG)...

Tonight, I'm adding a sixth...

And the name is...Dover Corp. (DOV)...

The last time I talked about this one was recommended way back on August 26, 2005 at $39.85 and now it's at $50...   We're up 26.8%...
 
DOV is a mosaic of an industrial company. It's got all kinds of divisions that would only fit together logically in a Escher painting... but that seems to be working okay for them, because the growing global economy needs so much of what DOV makes. What DOV makes the world takes.

Let me give you a run through of all the parts that make up DOV...

First there's the electronics division, 19% of sales... electromagnetic switches for the military, some telecom and micro components for hearing aids. 70% of that stuff goes overseas.

The next largest chunk of DOV is mobile equipment at 17% of sales. Here they make things like garbage truck bodies, tank trailers, compactors, vehicle lifts for transportation, waste management and vehicle service companies.

Engineered products is next, 17%: refrigeration systems, walk-in coolers, ATM's...

DOV has got a product ID division, 13% of sales...Industrial markings and coding systems, think barcodes... Material handlings is another 13%... that's winches, attachments for utility construction vehicles, power chains for off road vehicles.

After that is energy... 11% of sales and growing...  Sucker rods, control bit inserts, control valves, pressure components...

Again...  More better, cheaper energy... not another version of Grand Theft Number 4...

Finally, Dover's fluid solutions business makes up the last 10% of its sales. They're making nozzles, swivels used for delivering fuel... suction systems...Again, saving energy.

It's incredibly in demand, particularly in Asia...  DOV's sales are growing there 25%. The company gets 45% of its revenues from abroad.. but they've done a major restructuring... it was 39% in 2003... and you know where this one's going... it's becoming more of a rest of worlder...
 
Most of what this company makes is the stuff that's being devoured by the fast growing global economy...

Now, what exactly makes this new tech a stock you should own?...  What's DOV doing that's so innovative?...

You've got less flashy stuff like improved automation monitoring, lower energy consumption bearings, energy-efficient pumping systems and marking and coding systems that improve logistics.

But it's got flashy stuff... Trash compactors that's fueled by solar power...  Again, you think that's what they're doing at National Semiconductor (NSM)?...

It uses biodegradable oil and biodegradable hydraulic fluids...  Do you think that's what they're doing at VeriSign (VRSN)?...

This is a lot better for the environment...

How about refrigeration systems for supermarkets?... You think Seagate (STX)'s got anything like that?...

These are more energy efficient...  You think Western Digital (WDC) has that?...  They emit fewer green house gases and they do a better job and preserving perishables...

Based on their sales, these are all working...  

DOV's shareholder-friendly, unlike a lot of tech companies that don't give you back anything, and the CEO's align themselves with stock options... these guys keep buying back stock... $311 million dollars left in the buyback.. 3.2% of the float...  They have been buying back stock methodically.

How about this?...  Out of the whole S&P 500, this is one of the top five dividend raisers... It's raised its dividend for 52 straight years. The yield seems small, 1.6% but, remember, they raise it all the time, just like Procter & Gamble (PG), another Cramer-fave.

Now get this... This is, again, what I try to deal with in terms of tech vs. new tech...

DOV trades at 12.6 times earnings... It's got a 15% long term growth rate...

Now, Intel (INTC)... It has a 15x multiple and a 12% growth rate... Cisco (
CSCO) has got the same growth rate as DOV, and sells at 19x earnings. All of these are absurd. DOV should swap multiples with these old techies, and then the evaluations would make sense.

.  .  .  .  .

The Bottom Line!:      Dover Corp. (DOV) is our final new technology company. I know its a pastiche.  But it is one that is focused on innovating to solve real problems, and deservedly growing, because it's not just trying to come up with a better mp3 player or better video game company.   What it does is create solutions that customers want to buy.


[See Jim's 2nd Opening Segment stock picks below... ]

 

 

 



See all of tonight's stocks' latest quotes on Yahoo! Finance



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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)

DOV

50.63

na

Dover Corp. (DOV)



         

 


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Second Segment
 
 
Opening Segment 2 Title: 'General Impression'

CEO Interview
Ken Powell, CEO

.  .  .  .  .

Featured Stock(s): General Mills Inc. (GIS)

See TSN's official website here.

See the Yahoo! Finance profile for TSN here.

 
After this segment, you can see Jim's Lightning Round picks here...


Jim's comments BEFORE interview:    We spent all week trying to understand, perhaps, the biggest conundrum facing the market right now... definitely, one of the most confusing moments I've ever seen for the food stocks, which were always so simple to understand...

On the one hand, the supermarket stocks typically do very well.  When you go down the grocery isle in our time of hard times, it's usually a good place to hide, right.  On the other hand, raw costs are skyrocketing. Grain, meat...  courtesy, in part, because of our governments mad obsession with ethanol. 

This should be killing the group, but we've got restaurant stocks like Yum! Brands (YUM), at a 52 week high. We had
Warren Buffett and Mars, snapping up Wrigley (WWY) last Monday at a really high price...

Because I don't want you to get lost in the supermarket, I've been talking to the CEO's of some really great American food companies... We spoke to ConAgra (CAG) earlier... we spoke to Heinz (HNZ), we spoke to YUM, we spoke to the very conflicted Tyson Foods (TSN), where Mr. Bond (CEO) told the truth that 30% of the corn crops have been diverted to 3% of gasoline, and making it so you can barely afford chicken nuggets...
 
But how can we go to the supermarket without going to the stock of the company?...  I have literally been recommending this stock for 24 years of my life, from my first year out of Goldman Sachs trading program, until now... I have been recommending this one stock...

There is probably no other stock I have consistently recommended in my career...

It's General Mills Inc. (GIS). It's GIS...

And this is one of the best run companies and, once again, given the fact that it is grain... given the fact that they have got to ship the stuff...  given the fact that it has this liner that's made of an oil-based product... the stock should be at its 52-week low, right?  No! It's at it's 52-week high...
 
This company is one of the largest makers of cereals, desserts, baking mixes...  It's a definition of a household name... And you'd think that GIS would be getting pants-ed by cost inflation...

Instead the stock has been en fuego!...  Why?...
 
For one, GIS has been doing a better job at putting in price increases to pass the higher input costs... It's certainly doing a better job than Kellogg (K)...

It also looks like these company's brands are holding up against cheaper private-label foods. Consumers aren't trading down. Plus the private label guys can't make it any cheaper either, because their costs are going up...
 
GIS is doing well internationally, although I wish it were a larger part of the business...

Revenues grew 20% in the most recent quarter, versus 9% for the US retail business.

This company is a buyback machine... It's got 42.8 million shares to buy, 12.8% of shares outstanding...  

I don't know whether or not to buy it here... and to answer that kind of question, of which I will still do, but the management will help me...  and to tell us how his company is succeeding in this environment, and talk about what happening in the supermarket more generally...  I've got a great manager...

This is President and CEO of General Mills, Ken Powell...  

Mr. Powell, welcome to Mad Money...

.  .  .  .  .


Jim's comments AFTER interview:    Ken Powell, you're a winner, your company is a winner...   Real simple, everybody. You want to own a stock...and, remember, we always have to do homework... but General Mills (GIS)... Anytime this stock goes down, here's what you do... it's pretty simple... BUY BUY BUY!

.  .  .  .  .

 

   
 

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)


GIS

61.67