Cramer’s ‘Quinfecta’ Stock Play
There’s a company that brought a secondary offering to the market yesterday that Cramer wants you to watch – Haynes. No, not the underwear maker. We’re talking performance metals here, the same business as Allegheny Tech, Cramer’s stock of the year last year and a fave again in 2007 because of its focus on high-performance metals used in energy and aerospace businesses.
Haynes joins that red-hot club along with existing members Precision Castpart, Titanium Metals, Hexcel, RTI International Metals and Brush Wellman – all Cramer-backed stocks. Haynes even has a great niche business on top of aerospace, metals used in land-based gas turbines, a must to alleviate energy crisis concerns, which Cramer bets will dwarf subprime worries.
The best thing about Haynes is that the demand for its product is only exceeded by the demand for its stock. That means more analyst coverage as the metals analysts are starved for a new name – and the secondary offering puts enough stock out there to bring the company into focus. Even better, the history of secondaries that produce strong demand in the aftermarket – because institutions now know they can get in and out of the stock more easily because of the increased float – is amazing. Zumiez, CROCS, Gartner and Horizon Lines are all perfect examples of this type of success.
Bottom Line: Cramer likes Haynes because it’s fixing its balance sheet, has strong demand for its product, and it’s a cheap stock in a sector that is red hot. It could be the next big thing in metals.
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