Coach is a Winner - Cramer's Mad Money (5/8/08)

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Thursday May 8. Click on a stock ticker for more analysis.

Nordic American (NAT)

Cramer said there is a stock for those who are looking for strong growth and a double-digit dividend: Nordic American, which is up 18% since last July (38% considering the dividend) and will be the next Frontline. With oil production increasing, companies are willing to pay more for oil tankers, and Nordic American has been able to raise its day rates from $27 to $46,000. The company raised its dividend by $1.18 after its earnings report, and if the price of rigs goes up to $70,000, the dividend could be a whopping 22%. Although Nordic missed its earnings expectations, Cramer has faith in those climbing day rates, and he is not concerned that few analysts are bullish on the stock.

Ormat(ORA)

In honor of the 60th birthday of the state of Israel, Cramer focused on geothermal powerhouse Ormat, which has risen 51% since Cramer's initial recommendation in February 2006. Although the company is 60% Israeli-owned, its headquarters are in Nevada. Geothermal energy extracts hot water from the Earth's magma, and although the process is confined to areas with high geological activity, geothermal is a permanent and renewable source of energy. Ormat produces 400 megawatts yearly and has plans to increase annual production by an additional 100 megawatts. It has the advantage of producing its own equipment, and while the stock trades at a fairly expensive 33 times next year's earnings with a 22% growth rate, Cramer thinks there is opportunity for an upside as more analysts become bullish on the stock. He would wait for a pullback and use limit orders when buying.

Coach (COH)

Cramer is releasing Coach from the Sell-Block and said if he had believed CEO Lew Frankfort when appeared on Mad Money and said the bad quarter was just temporary, he would have caught a double in the stock. Cramer admitted he was guilty of being too eager to believe media reports about COH's inventory problems which turned out to be a non-issue as sales have been on the increase both in the U.S. and abroad. The company reported 19% revenue growth and trades at a "criminally cheap" 15 times earnings with a 18.3% growth rate. The company is aggressively buying back stock and Coach's products are gaining popularity in China and Japan.

CEO Interview: Peter McCausland, Airgas (ARG)

Cramer once again welcomed Peter McCausland onto the show and noted ARG has risen 36% since his last visit in March 2008 and 86% since McCausland first appeared on the show. McCausland addressed analyst concerns about how ARG will fare in a slowing economy by pointing out almost every sector in the economy, including healthcare, uses ARG's products. Although some of the company's segments are cyclical, most segments grow faster than the economy. ARG has been making the most of its acquisitions and its cost savings strategies.

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