Mad Money

Shaw Group: Power Player or Radioactive Waste?


Who says you can’t invest with good conscience?

Nuclear Reaction?

Sometimes there’s a healthy overlap of high-quality stocks and green(er) companies. Take nuclear power. Yeah, the environmentalists hate nukes, but these power plants offer one of the best ways to reduce greenhouse gas emissions – because they release absolutely none into the atmosphere.

On the business side, there’s another reason the nuke stocks can work: Unlike natural gas – Cramer’s preferred way to cut carbon emissions – nuclear power is backed by the full faith and credit of the US government. President Obama has tripled the federal budget for loans to construct new nuke plants to $54.4 billion from $18.5 billion.

One of Cramer’s favorites in this space is Shaw Group , an engineering and construction company with a significant nuclear power plant building business. Shaw just reported a solid quarter, beating the Street’s estimates by a penny. While orders were down, as expected, the backlog came in at $21.3 billion. To put that into perspective, keep in mind that Shaw is only a $3.2 billion company.

Plus, Shaw, trading at $37, is sitting on $19 a share of cash. That means the company has a lot of options. And Cramer thinks the power part of its business could be a major source of future upside. Turns out the Nuclear Regulatory Commission expects to receive 46 applications for power “uprates,” or projects that increase the power output of a given nuclear plant, between 2010 and 2014.

SHAW is up 194% since Chairman and CEO Jim Bernhard appeared on the show on Nov. 18, 2008. Cramer on Wednesday invited Bernhard back to see where the stock could go next. Watch the video for the full interview.

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