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The Truck Bull Market’s Only Undiscovered Play?

Friday, 7 Jan 2011 | 6:53 PM ET

So the truck industry right now is on fire. It’s en fuego, raging, running full steam. But does that mean you missed the chance to play it?

Absolutely not.

Haulin' Some Cash?
Could Cramer's convoy of truck suppliers help you get your portfolio where it needs to go?

Cramer on Friday offered up a new speculative way to invest in this sector: Accuride . It’s one of the largest and most diversified manufacturers of parts for commercial vehicles—think trucks and trailers—in North America.

Of course, now you’re asking yourself why no one else is buying this stock if it’s as good as Cramer says. That’s because Accuride just listed on the New York Stock Exchange a few weeks ago, Dec. 22.

The company exited bankruptcy in February and looks ready to capitalize on the increased demand for all things truck and trailer. So much so that Cramer likened it to Lear , another autos-related name he recommended after it had cleaned up its balance sheet in November 2009. A little more than a year later and that stock’s up 66 percent to $106 from about $64. The “Mad Money” host predicts similar good fortune for Accuride and its investors.

The company makes wheels, wheel-end components and assemblies, truck body and chassis parts, in addition to seating assemblies and other parts for commercial vehicles, and it’s either number one of two in terms of market share in most of its businesses. If you’re wondering how Accuride is doing, then look at the performance of its customers: truck makers Navistar and Paccar near their 52-week highs; trailer companies Wabash and Great Dane doing well; and light truck seller General Motors , which is in the middle of a recovery of its own.

Plus, we just got a very strong December class five through eight truck orders number on Wednesday, up 115 percent year-over-year. December’s a typically slow month for trucks, but that was the best result since May 2006. And the trailer business is up, too, with third quarter production climbing 70 percent year-over-year.

Cramer expects Accuride to do well for the same reasons he’d recommended Cummins : There’s pent-up replacement demand in the truck business as fleets are older than they’ve been at any other time in the last 20 years. Plus, they benefit form changes in emission standards that require trucking companies to replace to their older models with new, up-to-date vehicles.

And there’s a virtuous circle taking place. The growth in manufacturing leads to higher freight rates for truckers, which translates into more money for the trucking industry to spend on replacing that old equipment.

Accuride reported a solid quarter on Nov. 4, though the stock has barely moved since. Despite the outperformance only two analysts cover it, and ACW is cheap, trading at just 14.5 times preliminary 2011 earnings versus Wabco’s 16 multiple. Cramer’s recommendation? Consider the stock for some speculation.

“Just as Lear has given us huge gains since coming out of bankruptcy courtesy of a strong auto business,” he said, “so I expect Accuride will soar thanks to off the charts robust truck bull market.”

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

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