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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: |
'Positively
Charged' |
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. . . .
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Featured Stock(s): |
Emerson Electric (EMR)
See EMR's official
website
here.
See the Yahoo!
Finance profile for
EMR
here.
See Opening Segment 2,
below...
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After this segment, you
can see Jim's Lightning
Round picks
here... |
JJC:
If I hear another word
about Grand Theft Auto,
and how great its sales
might be... hey, I'm going
to hurl... that's right...
puke! That's how sick I am
about "old tech" stocks...
and why, tonight... I'm
devoting the whole show to
the new technology
companies that I'm trying
to get you interested
in!... The ones that
actually make things...
the ones that are
innovative, the ones that
are useful... the ones
that are wanted!... as
opposed to the "old tech"
stocks... What do they do?
They make gizmos for
wealthy workaholics...
felonious games to teach
teenagers the real deal...
I've got three... three
"new tech" stocks
tonight...
...the innovative,
American industrial
manufacturers that create
tangible things... things
that you know, but don't
know who makes them... the
heavy duty products that
fuel the strong global
economy...
Let's start with the
best...
You now have a chance to
buy one of my absolute
favorite industrials...
one of the quintessential
"new tech" stocks that you
don't know, that you must
know, and will know... And
that stock is...
Emerson Electric (EMR)!...
EMR is at a discount to
where it should be... Buy,
buy, buy!... I've been
recommending this stock
since 1984, when I was an
Associate at Goldman
Sachs... and I owned it
for much of the time that
I managed money in a
professional fashion.
Why? Because it's a pure
industrial growth stock...
That's not an oxymoron.
You can have an industrial
company that grows... It's
an industrial growth stock
that's made money in good
times and in bad. You
don't know how unusual
this is... Usually, these
companies, they lose money
in this environment...
they make money when
things are great... not
these guys. They don't
care.
It's made so much money
because, unlike "old
tech," - my name for
Silicon Valley - it's kept
innovative in helping
other companies make more
money...
It's making precision
machines better than just
about anyone else, for
here, and for the rest of
the world. We have no
equal, when it comes to
EMR...
Now, these guys just
reported a fabulous
quarter on Tuesday...
Everybody yawns... the
stock goes to $56, and
people say, who cares?...
I care! You need to care!
Even with its gains today,
it's a swindle, it's a
complete steal! It's a
buy, buy, buy! Do I wish I
had told you to buy EMR on
Friday, before the rally?
Of course I did! But, even
after today's move, I'm
still liking it. I think
the stock deserves to be
at $60 - and $60 pronto -
not at $56 and change... I
find that price an insult
to EMR, and to those that
own it... The fact that
it's hanging at this
discounted price?... A
gift!
I can't think of a better
representative of "new
tech" than EMR...
Now, I did recommend this
stock last August 24th...
The stock was at $47 bucks
then. Since then, we're up
19%. That's a lot better
than the market... I think
the stock can go a lot
higher, because it builds
the things the rest of the
world, and America too,
need in order to make a
better job... in order to
make everything work...
For example, 25% of EMR's
sales come from
something... it's called
process controls... a
business that, in plain
English, makes the systems
that manufacturers need to
optimize quality and
efficiency of their
businesses, of their
processes...
18% from industrial
automation... think
robots... EMR makes the
nuts and bolts of the
manufacturing process...
be it motors, belt
drives... to transmit
power... alternators... or
valves to control the flow
of fluids... EMR is there.
Automation... practically
the definition of becoming
more efficient... you can
see how this fits right
into my "new tech"
theme... making things
better that aren't just
video games!...
EMR also has a network
power business... 22% of
sales... and
uninterruptible power
systems for telco
networks. How about
cooling products for
computers and telco
equipment? It makes it
work... power systems to
transfer loads... All
these products are focused
on keeping networks
running, no matter what...
It's a small part of the
business, but it's
important. The company's
got a nice and simple
appliance and tools
business... 19% of
sales... It makes
motors... that's the
original business... This
is what I used to think of
EMR, as a motor
business... Controls, that
are used in tools and
appliances... along with
pipeworking tools and
shells...
It's a conglomerate...
Finally, EMR's smallest
business is climate
controls... red hot...
compressors, monitoring
equipment, furnace
ignition systems... to
make heat and
air-conditioning systems
run better... Think
Parker Hannifin (PH)...
Think
Eaton Corp. (ETN)...
think these guys, okay...
This is what
Intel (INTC)
and
Microsoft (MSFT)
used to do, okay... This
is what
Oracle (ORCL)
used to do... This is like
that...
Last week, when EMR
reported a beat (in its
earnings) by 4 cents, and
raised 2008 guidance, from
$2.90 to $3 bucks, and
then ranged from $3 to
$3.10, I said, slow down?
What slow down?...
They told us that orders
in March increased 10-15%,
up from 10% in January and
February... Here's a
company that's actually
doing better as the month
goes on... not like a
bank, where March fell...
Remember all the banks,
where March fell off a
cliff? Not these guys...
Process management orders,
up more than 20%.
Industrial automation and
network power orders were
each up 15-20%. These
three are the most "new
tech" of EMR's
divisions... And, while
the whole company seems to
be firing on all
cylinders, the "new tech"
parts are just on fire
here.
EMR's selling its European
appliance and motor pump
business. That'll take out
some of that cyclical...
that's the old stuff,
okay... the less new
technology component of
the company...
In 2007, EMR got 52% of
its sales outside of the
U.S... You know we only
recommend
ROW-ers here, when it
comes to industrial...
Last quarter,
international sales grew
by 10%... only 1% for the
U.S.... so we know how
right that is. We know
where this company's
growth has been coming
from, and it ain't here...
Emerging markets... 30% of
EMR's sales, compared to
18% in 2002...
Here's a company that's
been moving in the right
direction for years, and
it hasn't stopped...
Here's another reason to
like EMR...
Management expects $2.4
billion in free cash flow
this year. Most of that
should be going to
buybacks and dividends...
2.2% yield... that's not
shabby. This company has
raised the dividend for 51
straight years. This is
like a
Procter & Gamble (PG)
or a
Parker Hannifin (PH)...
The company announced a
new 80 million share
buyback plan... with a
total purchase
authorization of 86
million shares, 11% of the
shares outstanding. Hey,
come on... big buyback...
they think it's cheap.
Okay, get this... Right
now, EMR's trading at 16x
2009 earnings... with a
15% long-term growth rate.
Come on... you know it's
got to sell at at least a
point and a half better
than that... For the life
of me, I cannot understand
why a company, with this
kind of consistency, in a
tough environment, sells
so cheaply... I can only
imagine how much money
they'll make in better
times... and there will be
better times... believe
me.
I feel it's my job as the
host of Mad Money, to
point you toward the EMRs
of the world... even if
I've done it before for
some of you... because you
need to know how great our
manufacturing companies
are in this country...
And, in my opinion, EMR
has been a top-five best
manufacturer in the world
for decades. It just
doesn't get its due
because, while EMR has
been great at generating
money, it's not great at
publicity mongering...
kind of the opposite of
the "old tech" companies,
right? They do a lot of
promotion all the time...
Grand Theft Auto 4... wow,
that's real great... Grand
Theft Auto 4... it's
integral to the famine
issue, right? Doesn't it
really solve the energy
complex problems?...
EMR is actually working on
this stuff. Why trade in
fads, when you can invest
in longstanding,
dividend-generating
greatness?
Here's the bottom line...
. . . .
.
The Bottom Line!:
Sure, I wish I'd
recommended this stock
before Friday's
recovery... but I think
it's still a great buy at
these levels, because
Emerson Electric (EMR)
is the archetypal "new
tech" company... EMR,
Eaton Corp. (ETN),
Parker Hannifin (PH)... You know I'm not
going to let these themes
go... Cramerica is about
America's greatness...
Tonight is "new tech"
night... and my favorite
play, of the big ones, is
EMR.
. . . .
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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) |
|

|
EMR |
56.20 |
na |
Emerson Electric (EMR)
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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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Mutual-Fund-Holdings.com
NEW RESOURCE!
See Ken Heebner's CGM
Focus Fund
Top 25 holdings - The No.
3 Top-Performing Mutual
Fund in 2007
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Opening Segment 2
Title: |
'Know Your IPO' |
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. . . .
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Featured Stock(s): |
Colfax Corporation
(CFX)
See CFX's official
website
here.
See the Yahoo!
Finance profile for
CFX
here.
|
|
|
After this segment, you
can see Jim's Lightning
Round picks
here... |
JJC:
I've got a new one... a
fantastic, fresh-faced IPO
for you... It just came
public on Thursday... Come
on... that was a tough
week... no one was
thinking anything
positive... We've got a
new week... and now
everything looks positive,
right?...
And that's why I'm giving
you what I think is an
opportunity to get into a
new stock at a decent
price...
The stock is a
quintessential American
"new technology"
company... This ain't from
Silicon Valley...
This one is... Colfax
Corporation (CFX)...
CFX traded as high as $24
on Thursday, before the
whole market pulled back,
okay... and it's now back
to $20.89...
Remember, the stock comes
public, and everyone gets
excited, and then everyone
gets very dreary, because
of the overall market, and
they sell everything...
It's $20.89... it's just
above the opening price of
$20.50, on the day of the
IPO... This one is a pure
play on something you
better get used to me
talking about... because
it's a lot better than the
Pentium... than Vista...
This is called fluid
management... That is
industry speak for
products used in the
movement of liquids. I
keep telling you that
there is a world of change
out there. We need to
solve problems like oil
and gas, and how to ship
it... This flow systems is
about shipping and moving
oil, fuel, chemicals,
sludge, corrosives...
I know... fluid
management... it's sounds
totally boring...
completely irrelevant...
but it is, in fact, a
bedrock, "new tech"
business that's vital...
absolutely vital... to the
workings of so many
different industries...
oil and gas, oil
refineries, power plants,
chemical plants...
Fluid management is what
allows these things to run
smoothly. Without it,
things break down much
faster... Without CFX's
developments, you've got
to stop running a turbine
to lubricate. CFX let's
you keep running it, which
means far greater
efficiency, and saving of
energy...
I know we don't think of
lubrication in the
industrial sense, as
anything sexy or
innovative for that
matter, but it is vital!
And CFX has been
innovating... making the
literal grease for the
wheels of late-stage
capitalism...
Don't believe me about
fluid management? This is
one of the hottest groups
in the market... Take a
look at two of the
best-performing stocks
that you've never heard
of... Take a look at
Flowserve Corp. (FLS)
and Robbins & Myers
Inc. (RBN)...
which are mostly fluid
management plays... Hey,
when I saw RBN, up huge, I
said, jeez, I didn't know
they allowed law firms to
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