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Cramer: This stock is ready to roar

Buy Dow Chemical: Cramer

Looking for a good core holding that will give you dividends and growth? Jim Cramer thinks Dow Chemical is getting ready to roar and would be a sound portfolio addition.

Dow has been in self-help mode for a long time and finally got a face lift when it sold off assets to reposition its portfolio to have less commodity exposure and more exposure to margin specialty chemicals.

Yet, for some reason, the stock tends to decline when oil does, even though they should be benefiting from huge declines in oil and natural gas prices.

Cramer dug in deeper with the Chairman and CEO of Dow Chemical, Andrew Liveris to find out if the low prices of oil will continue to impact the repositioned version of Dow.

"The oil overhang is in our past. When we were a pure commodity company, there was a lot of view that commodity companies would go down in profits if oil prices dropped … Firstly, we are a very different type of company. Secondly, we have assets all around the world, like Europe, where a low oil price actually helps our margins. And thirdly, a low oil price is a massive discount to the world's economy. Like a tax break," said Liveris.

Andrew Liveris
Patrick Bucci | CNBC

Cramer's rule of thumb for investing has always been that he doesn't care where a stock has been, he only cares where it is going. Liveris is also taking the same approach by introducing a share buyback program with an aggressive timeline. Why such an aggressive timeline?

"Because we believe we are undervalued, and frankly, people cast us by our past. When you are 118 years young, you are really looked upon from your 118 years. Not your next five to ten," added Liveris.

Dow management clearly believes in such a strong future cash generation from the new company, which could give investors reassurance of a strong pipeline.

Read more from Mad Money with Jim Cramer
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Liveris confirmed this, saying "We have $5.5 billion in investments going on right now as we speak, and frankly we have become a cash engine and cash machine. This cash is going to fuel organic growth, plus the share buyback program, and the dividend increase. It is our company saying we are going to reward our shareholders."

The reinvention of Dow Chemical has left Cramer chomping at the bit, wishing that he had bought a larger position for his Charitable Trust.

"If there is one takeaway from this session, I think it might be very simple: Buy Dow Chemical," said Cramer.

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