Glass is overtaking plastic as the more environmentally friendly alternative, Cramer said, putting Owens Illinois, the world’s largest maker of glass containers, in a very profitable position.
Owens Illinois counts Coca-Cola , Pepsico , Johnson & Johnson , Anheuser-Busch , Diageo and plenty of other household names as clients. Now that these companies know that both making and recycling plastic uses much more energy than glass, they’re making the switch.
But there’s something else working in OI’s favor. Glass bottling is in tight supply and should be through 2010. Goldman Sachs expects the resultant higher prices to climb 6% to 7% this year alone.
OI absolutely blew away the number last quarter thanks to this mini bull market in glass. Instead of reporting 44 cents a share in profits, the firm reported $1. Not only that, but revenues were $800 million above expectations, and operating margins were two full percentage points higher than analysts predicted. All this and Owens Illinois is a real rest-of-worlder, too, with 70% of the business coming from overseas.
There is one small blemish here, though. Watch the video to find out what it is. Plus, Cramer explains the best time for interested investors to buy a position in OI.
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