Hydrating the Green Day Portfolio

Back on April 2, the Supreme Court handed down a decision that is the basis for Cramer’s weeklong “Green Day” series, in which the Court effectively made it profitable to start investing in companies that help cut back on pollution and clean up the environment. Cramer thinks companies that are levered to do this are going to start getting much bigger stock multiples and thus higher prices, which is why he’s been building a Green Day portfolio that he hopes will let you play this new trend. He’s already focused on plays for cleaner power plants, solar power and more efficient cars. Today, he’s talking about Tetra Tech – a water company that’s also expanding into alternative energy like wind and nuclear power.

Tetra Tech is a consulting and engineering company that’s levered to the scarcity of fresh, clean water. It’s a water company, but not a water utility. Those are no good, Cramer says.

Before he explains why he believes TTEK is a worthwhile investment, think about this: while everyone complains about high gas prices, the price of water is actually quite higher. If you go walk into a New York deli and buy a liter of bottled water – which, admittedly, would be an overpriced bottle of water to begin with – it could run you over $2. A liter of gasoline right now costs about 55.2 cents, Cramer says. That’s where Tetra Tech comes in – Cramer thinks it’s one of the few ways to play the astonishingly high price of water.

But Cramer really likes this company because it’s a pastiche. Eighty-five percent of TTEK’s revenue comes from water management – getting clean water where people need it by building infrastructure, and doing the same to get rid of dirty water. That, in addition to the purchase of a little wind power company called the Delaney Group puts Tetra Tech right in the sweet spot for a Green Day portfolio, he says. Consequently, the company is also a play on rising ocean levels, one of the worst consequences of global warming. It is involved in coastal engineering and flood protection work with New Orleans, the Panama Canal Expansion, the Indian Ocean Tsunami Warning System and the $5 billion rebuilding of the California levees.

Bottom line: Green Day has been all about clean air. Now it’s time to think about clean water, Cramer says, and he thinks Tetra Tech is the best water play to round out the portfolio.

Questions? Comments? madmoney@cnbc.com