Less Pollution, More Profits

You waited all week for Cramer’s ultimate Green Day play, and here it is: Fuel Tech. Earlier in the week, he told you that Foster Wheeler and Shaw Group were his picks for cleaner power, and they are if you’re looking for less risky, more proven companies. But if you feel like taking a chance, using some of the 20% of your discretionary portfolio that Cramer says is OK to speculate with, Fuel Tech might be for you.

FTEK has the technology that enables power plants to burn “clean coal” – reducing nitrogen oxide emissions – and it has a fuel chemistry business that improves the efficiency of coal plants, allowing them to burn less coal to produce the same amount of power. Those are two ways to pollute less while producing the same amount of power.

Coal provides over 49% of our electricity, Cramer says. And if energy independence is a priority, then the U.S. will probably use more of it. Now, because of that recent Supreme Court ruling, the coal that’s burned will have to be “clean.” Cramer thinks that puts Fuel Tech in a great position to profit.

And this isn’t just about the environment, it’s about efficiency. One of Fuel Tech’s first customers, a coal utility in the South, reported a 7% increase in net power availability even as the coal it burned declined in quality. According to Cramer, utilities for the most part are conservative – they don’t like to spend extra money investing in new technology unless they have to, which is why Fuel Tech is still a small, speculative company. But now Cramer believes Green Day changes the equation and will force many coal-burning utilities to become cleaner.

FTEK is also a play on China, which burns a lot of coal. That government is feeling pressure to clean up its cities’ air as the 2008 Olympics approach, and it has been a big buyer of FTEK’s products.

Make no mistake: Fuel Tech is a high-multiple, high-growth, high-risk speculative stock. It trades at 33 times 2008 estimates now, even though it’s expected to grow earnings at a 56% clip, Cramer says. He thinks the forward estimates could be too low, and FTEK isn’t all that expensive given its growth rate. Of course, if it stumbles or the market becomes volatile, the stock will take a big hit. It’s already down 25% from its peak before the computer-generated sell-off at the end of February. Cramer thinks it’s time FTEK bounced back.

Bottom Line: If you want to save the environment, join Greenpeace. If you want to make some money off the fact that someone’s gotta pay to save the environment, Cramer suggests buying Fuel Tech.

Questions? Comments? madmoney@cnbc.com