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Opening Segment 1
Title: |
'Gardner Variety' |
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Featured Stock(s): |
Gardner Denver Inc.
(GDI)
See GDI's official
website
here.
See the Yahoo!
Finance profile for
GDI
here.
See Opening Segment 2,
below...
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After this segment, you
can see Jim's Lightning
Round picks
here... |
JJC:
Another ugly, completely
hideous day... led down by
all the stuff we hate in
Cramerica... the
banks, the retailers, and
of course, the
automakers... Sell, sell,
sell!...
If you own any of them,
well you're obviously like
the Gollum... I'm not
listening, I'm not
listening... you're not
listening to the show. And
you are taking the full
front of a down-220 day...
Oh, and by the way, my
forecast for you next week
if you persist in owning
this nonsense, is to quote
the greatest stock guru of
all time... to quote Mr.
T, my forecast is
"Pain!"...
. . . .
.
All right look, my job is
to keep you in the game...
And this is, even after a
day like today, the
greatest game ever
invented to make money.
And I need you to
recognize that I can't
keep you in the game if
you persist in bottom
fishing in those toxic
banking rivers, in the
toxic housing rivers, and
of course, anything auto,
and auto related.
See, in Cramerica, we are
believers in the same long
term theses we have
propounded since the show
began... If you don't know
them, go get
the darn book...
Agriculture, minerals,
mining, aerospace and
defense, infrastructure,
and by far, most
importantly, the petroleum
complex that includes
natural gas... this is the
year of natural gas...
crude oil, and everything
needed to bring crude oil
and natural gas products
out of the ground and into
the gas pumps, and the
powerplants that use them.
Today was no different.
Those stocks were the only
green in the sea of red.
Yet, we still have
non-believers, people
adverse to buying into
these trends. So we
are going right back into
the well, so to speak, to
recommend a stock that not
only survived, but thrived
today's onslaught and I
think will continue to do
so, and that stock is...
Gardner Denver Inc.
(GDI)...
No, not Bob Denver, for
heavens' sakes...
. . . .
.
GDI, which makes key parts
for getting at energy and
getting it shipped to
where it is needed, is not
a new stock on Mad Money.
I recommended it on
September 26th at
$36.60... And it's up 46%
since then, so I've got
some street cred here...
But it has, and I'm going
to explain this in a
moment, it has only gotten
cheaper because while up
62% year over year, is
still way behind where I
expected it to be by year
end, because its earnings
are on a tier, just a
tier... And what
happens by the way, when
earnings go up?...
Stocks follow...
And this one has not kept
up pace with earnings.
What's GDI do? It's
all about that stuff that
I'm telling you is
right... but you don't
want to hear about,
because you're too worried
about why they're in
networks, and worried
about customer retention
software...
GDI is making the
important products,
compressors, blowers,
industrial vacuum pumps,
fluid transfer products...
Remember fluid, as soon as
you hear that, listen up.
Fluid control may not be
sexy, but it's been
rocking with the flow
serve at 133, just 7
points off the tide...
Robbins & Myers Inc. (RBN),
at $41 and change, 3
points off its high... And
Cramer-fave,
Colfax (CFX),
which is just 2 points
away from its high of $23
and change, and up 12%, by
the way, since I
recommended it on May
12th...
Why do I point these out?
Because where are your
bank stocks?... Down 40,
50, 60, 80. Where's your
Ambac
(ABK)s?
Your
MBIA (MBI)'s,
down 90. Your
housing stocks, HGX, down
$60... $70...? No,
we buy stocks that are
working on Mad Money.
. . . .
.
The key to GDI's success,
and the reason why it's
not just an oil play, but
a "new tech" stock, is
that it builds proprietary
technology into all this
"nuts and bolts"
equipment... So you
need compressors, blowers,
industrial vacuum pumps,
transportation, loading
equipment and water
jetting systems...
All the things that GDI
quietly makes that move
things and create the
energy that you use. If
you want to extract oil,
so even though this
company gets only 23% of
its sales from energy,
meaning oil, and gas...
It should go higher when
oil goes higher, as it did
today.
Now I think it means you
now have a chance to buy
GDI up slightly today, was
not up enough.
Why?... Because it's not
just making compressors
and vacuum pumps and fluid
transfer systems, it's
making better compressors,
better pumps and better
fluid transfer systems
that are designed to be
smaller, more effective
and more energy efficient.
That's the definition of a
new tech stock. Why,
while old tech companies
design video games that
require larger and larger
pieces of equipment and
better chips to play, I
think Rock Band, and
consume, ever more
energy... And by the
way, I'm actually being
kind to Silicon Valley,
here, by not focusing on
any of the other zillion
games that teach your kids
how to kill people.
GDI is just the opposite,
even though it's not
exciting. Now, you know,
my most boring stocks are
my best picks, okay.
Plain and simple.
GDI's proprietary
technology is designed to
help solve the big
problems of mankind, not
the little problems of
trying to keep our kids
interested and staying
alert in front of a
screen.
. . . .
.
Let me give you an
example...
GDI just introduced a new
stainless steel pump that
is specifically designed
for the transfer of food
grade products from tank
trailers... I know,
but listen... remember,
food... stopping famine...
is one of those top ten
needs of humanity that new
tech solves. GDI's
pump has a new design that
allows for easier cleaning
and maintenance...
So you should be thinking
less spoilage, smoother
operations, less
contamination of food, not
to mention faster transfer
from food from the tank
trailers to wherever it's
going. What does
this mean? It means
more food is saved at less
cost. It is just a huge
issue, and GDI is trying
to solve it.
You want another
example?... GDI is
shrinking the size and
increasing the efficiency
of a whole host of
industrial products it
designs. A smaller
size for the blowers, for
example, minimizes leaks,
increases efficiency,
ideal for applications
like now... it sounds
boring but let me give you
what it's for... for
something that's going to
be worth a lot of money
with oil at $130 and
change... fuel
cells. Yeah, sound
like "new tech" to you?...
Fuel cells. Air
samplers... they make
cleaner air and gas
boosting energy.
Again, getting more out of
the energy we have.
. . . .
.
By the way, I should take
a moment to mention again,
that this is Cramer's year
of natural gas, and
companies like GDI that
make gas boosting
equipment... this is
equipment that compensates
for any loss of pressure
inside of a gas pipeline,
should thrive...
Natural gas stocks, were
up in the down-220 day.
GDI has the number two
market share positions in
most of its markets.
It generates 59% of its
sales, not in the United
States, in the rest of the
world... we know the rest
of the world is doing a
much better than we are,
and its results have been
fabulous. When it reported
on April 3rd, it did one
of those things called a
beat and raise, one of our
favorite moves on Mad
Money... you know, you'll
be listening to Joe Kernan
in the morning, and he'll
say well, GDI beat by
United States Steel
(X),
and then you say, ooh, why
didn't I have that.
Okay, this one beat,
bringing in earnings per
share of 95 cents, 15
cents better than the
consensus estimate, when
it happened, it was all
the talk of the morning,
and you didn't own it.
Right now, GDI is trading
at 13x a $4 forward
estimate... I think
that estimate is 50 cents
too low, and the multiple
itself is too low, given
its peer group, which is
two to three multiple
points higher.
Remember, you times the
earnings, times the
multiple to get the price.
Simple equation, e times m
equals p, okay... And I
say the earnings estimates
are too low and the
multiples are too low.
. . . .
.
Why don't we give it the
peer group multiple?...
Give it like all the other
oil drilling and the
Schlumberger (SLB)s,
the
Halliburton (HAL)s,
the
Nabors (NBR),
the
FMC Corp. (FMC),
you know what you get?...
A $65 stock... a 21%
gain from here, and
believe me, I am being
conservative, I am being
conservative...
I should also mention,
that GDI is a believer in
its own stock.
They've got an aggressive
buyback... Sir Mix A
lot, again, I like big buy
backs and I can not lie...
They bought back 1.2
million shares in the
first quarter... sounds a
little bit low, right?
1.5 million shares left in
the buyback, but this is
shareholder-friendly...
There are only 52 million
shares outstanding, and it
doesn't take a lot to move
it. So I know
it may not be interesting,
but think about all the
stocks I've been
mentioning that are not
interesting, what do they
have in common?...
They tend to go up...
. . . .
.
The Bottom Line!:
For a "new tech" play with
great oil and gas
exposure, I recommend you
look no farther than
Gardner Denver Inc. (GDI)...
a stock, that was up in
the midst of the tsunami
of pain today, and a stock
that I expect to hit the
mid-$60s... 14, 15 points
higher, maybe... just by
year end.