Cramer Examines DuPont's Long-term Prospects
In this tumultuous market environment, Cramer on Thursday said it's important to find companies that give us a long-term reason to buy their stocks.
Throughout the week, Cramer has recommended a number of companies with strong five-year plans, including Honeywell , 3M and Ford Motor. On Thursday, he highlighted DuPont .
Although it began as a chemical company more than 200 years ago, DuPont is constantly reinventing itself. Today, the company makes high-performance materials, specialty chemicals and electronics, as well as agricultural and biotech products. DuPont has a terrific approach to doing business, Cramer said, because it looks for global mega trends and then looks at ways to capitalize on those opportunities.
Cramer noted it's heavily focused on emerging markets, like Brazil, China and India. It expects to increase sales in emerging markets by a 10 percent compound annual growth rate over the next five years from $10 billion to $16 billion. Emerging markets currently represents 32 percent of its total revenues, but that could grow to 36 percent by 2015.
Within its ag and nutrition division, DuPont projects up to 10 percent compound annual revenue growth through 2015. This plays into the global mega trend of helping farmers get more crops out of the same amount of land.
Its safety and protection business is projected to growth at a 21 percent annual clip through 2015 with its safety margins expected to increase from 15 percent last year to up to 25 percent in 2015.
Meanwhile, its electronics and communication division could grow sales from $2.7 billion this year to $4.5 billion in 2015.
In the end, Cramer thinks DuPont's plans are "more than do-able." He likes this secular growth story because it's levered to the fast-growing emerging markets. DuPont is a buy, buy, buy.
When this story was published, Cramer's charitable trust owned DuPont.
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