Cramer's Mad Money - Waste Management Makes Cash From Trash (4/17/12)

Includes: LNG, WM
by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Tuesday April 17.

CEO Interview: David Steiner, Waste Management (NYSE:WM)

Even though a proposed bill to give tax incentives to companies that transform their diesel truck fleets to those that run on natural gas was defeated in Congress, many companies are taking the initiative to make the transition, because switching to natural gas makes good economic sense. Most of Waste Management's (WM) garbage trucks run on natural gas, as well as 90% of the new trucks it plans to purchase. The company not only transports garbage, but has found a way to extract methane from its landfills and transform it into natural gas; the energy produced will be ten times greater than what solar panels can generate. Cramer asked CEO David Steiner about the problem of disposing of hazardous electric car batteries, and Steiner says the company will meet the challenge and is finding solutions for car battery disposal. Cramer is positive about WM, especially with its 4% yield.

What Caused Stocks To Rally?

With the Dow up 194 points on Tuesday, pundits are trying to find what might account for the big move. Often these pundits try to connect stocks moving up with a statement from Ben Bernanke or other macro data. Cramer thinks the combination of China's easing, India's interest rate cuts and strong earnings are behind the move, with an emphasis on the performance of companies over macro data from individual countries. He reminded viewers; "Companies give dividends, not countries."

CEO Interview: Charif Souki, Cheniere Energy (NYSEMKT:LNG)

With natural gas prices at historic lows and the slowness of the government to support the adoption of the fuel, exporting natural gas in the form of liquified natural gas [LNG] is going to be a big business. Natural gas fetches higher prices overseas, and while transforming the fuel into a form that can exported is not a simple process, Cheniere Energy (LNG) is dealing with the challenge by building export terminals. It received government approval to transform a natural gas import terminal in Louisiana to an export terminal, and is hiring 3,000-4,000 people for its initial stages. CEO Charif Souki says demand for the fuel overseas is "almost infinite," and after the deal is finished, there should be plenty to return to shareholders. The stock has risen 115% since Cramer got behind it in June 2010, and Cramer is bullish on LNG.

How Volatile Is the Market?

With a rally in stocks, have we climbed over the wall of worry or are we seeing signs that the stock market is becoming more volatile. Cramer discussed VIX expert Mark Sebastian's analysis on the VIX Index, which measures volatility. According to the VIX's historical patterns, the index was moving up and down wildly prior to the bursting of the tech bubble, as well as in 2007-2008 before the major economic slowdown. The VIX was also up and down quite a bit in late 2011, but has been declining with the bullish move in stocks for the first quarter of 2012. Sebastian thinks the VIX is on a decline, along with fear, but this could change if the index breaks above $20.


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