Cummins Get It - Cramer's Mad Money (4/25/08)

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Includes: BEAV, CMI, DISCA, PCP
by: Miriam Metzinger

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program,Friday April 25. Click on a stock ticker for more analysis.

Precision Castparts (NYSE:PCP), BEA Systems (NASDAQ:BEAV)

Cramer found some "camouflaged" green plays on Friday, BEAV and PCP, both of which produce parts for Boeing's environmentally-friendly plane, the Dreamliner, which is still in production. The Dreamliner is expected to consume 20% less fuel than an average plane. PCP is a good early-cycle play for the Dreamliner, and BEAV will make money once the plane is actually released. PCP's orders for Dreamliner comprise $4 billion out of its total $7 billion in orders, and its other customers include General Electric, Rolls Royce and United Technologies. It is also levered to nuclear power and has strong international exposure. BEAV has a $2.2. billion backlog and should see $1.6 billion from Boeing, almost doubling its revenues. Both companies saw a gigantic rise in the last aerospace bull market, and will be flying on the Dreamliner's release, according to Cramer.

Cummins Engine (NYSE:CMI)

Cummins is an unlikely green play because it makes engines, but Cummins is developing greener engines to comply with new emissions standards. CMI is racing ahead of the competition and is already testing engines compliant with 2010 and 2011 standards. These engines are 6% more efficient than Caterpillar's and the company is has is rapidly stealing market share; its share of class 8 engines jumped from 25% in January of 2007, to 42%; the biggest grab Cramer says he's seen since he started Mad Money. Even though the company rose 53% since Cramer recommended the stock in April 2007, and he says it is still super cheap at just 10x earnings, 21% long-term growth rate, and Cramer expects to see a double. Cramer would buy CMI ahead of it earnings report on Wednesday.

Discovery Holdings (NASDAQ:DISCA)

While DISCA is up only 6.2% since Cramer's recommendation last year, he noted the Dow Jones Industrial Average was down 5.6% during the same period, and DISCA has catalysts to bring it higher. The company is starting an eco-channel called Planet Green later this year, and is teaming up with Oprah Winfrey to launch the Oprah Network in 2009. Recent changes to its financial structure make the company easier to understand and DISCA will improve access to cash flow.

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