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Cramer’s been predicting that 2009 will be the year for wind-power stocks, but the sector’s been showing plenty of strength this year, too. Just look at Woodward Governor, a new Cramer favorite. Management’s expecting its wind-power division to bring in as much as $100 million in 2008 compared to $40 million in revenues last year. That’s 150% growth.
Woodward Governor’s [WGOV
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] been ahead of the curve in the wind-power game, buying German designer of power generation products SEG back in 2006, so that helps. Recently, WGOV added a Chinese wind turbine manufacture to its portfolio, and there are plans to open a factory in Colorado to build even more wind products.
But wind power isn’t the only business that WGOV is in. Woodward Governor makes systems that improve the energy efficiency and emission control of gas and diesel engines, as well as steam turbines and compressors in its engine-systems division. (This kind of high-tech focus on improving the manufacturing process puts Woodward in Cramer’s “new tech” portfolio with stocks like Emerson Electric [EMR
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], Parker Hannifin [PH
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] and Owens Corning [OC
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]. Instead of developing cutting-edge video game graphics, he said, this company makes products the world truly needs.) Woodward’s has some exposure to Boeing’s [BA
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] 787 Dreamliner also, so Cramer’s expecting good things now that the plane’s much-anticipated release is back on schedule.
Despite all this growth and potential, Woodward Governor, trading at 18 times earnings with a 12% growth rate, is still cheap. Sales last quarter alone grew 19%; earnings per share grew 48%. That multiple should be closer to 28 times earnings, Cramer said, which would make the $35 stock likely to hit $53.
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