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Cramer: Share boosting transformation underway

It's not an easy thing to do, but Jim Cramer firmly believes companies can reinvent themselves, provided they have a clear vision and are willing to make tough decisions.

And if any CEO is up to the task, Cramer says it's Alcoa CEO Klaus Kleinfeld. "For years I have bemoaned that Kleinfeld isn't getting credit for what he's done," said the "Mad Money" host.

And Kleinfeld has done a lot.




Image Source | Getty Images

"He has lowered the cost of alumina and aluminum smelting by closing uncompetitive plants in locations where labor and energy are both problematic," Cramer said.

Also, under Kleinfeld, Cramer noted that Alcoa had begun manufacturing lighter weight metals, in turn, allowing for the development of more energy efficient planes, autos and trucks. "That was no easy task," Cramer said. "It involved Kleinfeld dealing at the highest levels with the manufacturers rather than just letting the customer procurement departments run the show."

But perhaps the piece de resistance was Kleinfeld's acquisition of Firth Rixson, a maker of jet engine parts. "Given the extensive backlog for planes, it's a hard to imagine a better end market," Cramer said.

All told, Cramer believes Kleinfeld's initiatives have laid the foundation for a more robust Alcoa. And he thinks recent earnings reflect the promise.

Earlier in the week, Alcoa reported earnings of 18 cents a share, excluding certain items, on revenue of $5.84 billion. The company also reaffirmed that it expects global aluminum demand to grow 7 percent in 2014.

Analysts had expected the company to report earnings excluding items of 12 cents a share on nearly $5.66 billion in revenue, according to a consensus estimate from Thomson Reuters.

"Well done, Klaus Kleinfeld, you've pulled off what many thought was impossible: a reinvention of a company long left for dead," said Cramer.

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As noted above, it's not an easy thing to do. However, when a transformation gains traction it can drive shares higher. And results suggest to Cramer that Kleinfeld has traction. "He's creating real value right before our eyes," Cramer said. "And, fortunately, for shareholders, it's still the beginning."

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

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