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)...
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.
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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)
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...
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)
Go to the LIGHTNING ROUND from
tonight's show
here >>
See current quotes on Yahoo!
Finance from
tonight's show stocks
here >>
Symbol keys:
A Charitable Trust stock.
- An asterisk next to a
stock symbol indicates that
Jim mentioned it is a stock
that he manages within
his
charitable trust portfolio.
You can see the complete
portfolio
of stocks
here >>
Thumbs up - indicates
he would buy the stock or,
at the very least, not sell
the stock. We do our
best to interpret Jim's
opinion on stocks, as we
think it is indicated by his
comments during the show.
Please read his comments to
decide for yourself.
Thumbs down -
indicates he has said not to
buy or to sell the stock,
based on his comments
We do our best to interpret
Jim's opinion on stocks, as
we think it is indicated by
his comments during the
show. Please read his
comments to decide for
yourself.
Back up the truck -
indicated by Jim, when he
says the stock is so good,
that he would do a
'mon-back' on the stock...
In other words, this is the
sound someone would say to a
truck driver, "Come on
back... " as he is "backing
up the truck" to load up on
his cargo. Translation
for buying stocks:
This recommendation by Jim
indicates that, after you do
your own
homework on the stock,
you should feel comfortable
loading up on it, as it is
in a good position to be
bought at this point.
Stumped. - Of the
2,000+ stocks that Jim
Cramer has in his head, for
which he has an informed
opinion, he sometimes comes
across a caller with a stock
he does not know well enough
to opine on... He then
indicates he is stumped and
will have to come back to
it, after he does some
homework of his own on
the stock. This
usually occurs during the
Lightning Round, when Jim
does not know in advance who
is calling, or what their
stock question is about.
Definitions of key phrases
used by Jim, known as
"Cramerisms":
Definition: 'Pull the
trigger' is Jim's phrase for making
the decision at that point to trade -
either to 'buy' or
to 'sell' (although he
usually uses the phrase for
buying), as if to say you
should feel comfortable
enough to make the final
decision without looking
back...
Definition: 'Ring
the Register' is Jim's phrase for
selling a stock, and making
it a final sale, that you
should not look back on.
Put it behind you.
Definition:'Let It Come In' indicates how you
may wait for it to pull back, or have the
stock price come down briefly, as your
chance (after letting it come in) to buy
the rest of your position (i.e., total
number of shares you own in that stock).
Definition:'backing it up'
or 'doing a 'mon-back' is Jim's
phrase for the metaphor of backing up a
truck to load up on a stock by buying
it. 'Mon-back is short for the
imaginary worker saying, 'Come on
back...' as the truck is backing up to
receive its load... Notice that we use
the little truck icon to indicate where
Jim has mentioned this.
Translation for buying
stocks: This
recommendation by Jim
indicates that, after you do
your own
homework on the stock,
you should feel comfortable
loading up on it, as it is
in a good position to be
bought at this point.
See more
"Cramerisms" & other
financial phrases
here >>
Helpful Websites:
See the stocks currently
known to be in Jim Cramer's
Charitable Trust at:
Stock Homework 101:
This is an excellent
upcoming site that provides
resources and links to help
you do that homework that
Jim Cramer recommends after
hearing his suggestions...
FastMoneyRecap:
This site will be a quick
summary of recommendations
made by the great Fast Money
TV show crew, that will
offer you a unique service,
to compare their picks to
Jim Cramer's past comments
about those stocks.
