In Stocks, Boring Doesn't Equal Bad
Gardner Denver is a great play on the strength of oil and the euro, Cramer said, but it’s not the sexy stock most investors seek out.
To put it bluntly, Gardner Denver is a boring industrial company. It makes the tools needed to extract oil from the earth: compressors, blowers, industrial vacuum pumps, petroleum pumps, transportation loading equipment and water jetting systems. But a lot of oil companies are spending big money on these tools right now, so that adds a dash of excitement to GDI.
The stock is cheap too. If Baker Hughes and National Oilwell Varco can trade at 15 and 16.5 times next year’s earnings, then Gardner Denver, presently trading at under 11 times earnings, deserves at least a 13 or 14 multiple, Cramer said.
And Gardner Denver has the keys to Cramer’s heart: international growth. The company gets 58% of its sales from overseas. Europe alone is responsible for 36%. Cramer said he prefers the Euro zone to the U.S. because the Continent has a stronger economy.
While a lot of people whine and wail about the weak dollar, it’s actually a good thing for Gardner Denver. It makes its money in euros then converts its revenue back to dollars at incredibly beneficial exchange rates.
When even Buddhist monks in Myanmar are taking to the street, at least in part, over gasoline, the oil bull market is likely to continue. Investors should buy at a discount any chance they get.
“Gardner Denver is exactly the kind of stock you want to be ready to pounce on when the market gives you this kind of sale, when oil’s actually down like it was today,” Cramer said.
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