Just as Cramer declared 2008 the year of natural gas, he’s now ready to predict that 2009 will be the year of wind power.
Wind is one of the best and cheapest forms of renewable energy, Cramer said, which is why green-focused advocates sing its praises. The problem for investors, though, is that there are very few pure plays on wind power. That’s why you need to get creative and look for companies like Trinity , largely known for making railcars, that have exposure to the sector.
Enter Kaydon . On the surface, it's a simple manufacturer of bearings -- another play on renewable energy because bearings reduce friction and increase efficiency for myriad products -- but Kaydon's the top maker of power bearings for wind turbines, and it owns half the market.
Kaydon’s wind-related sales were less than 10% of revenues, but are expected to grow to 20% next year and triple in two years. And that’s based on what Cramer called “low ball estimates” that he thinks it can beat.
Cramer called the rest of Kaydon the nuts and bolts of "new tech" since these divisions serve some great end markets like defense, aerospace and heavy industrial equipment. Kaydon is the nuts and bolts of “new tech,” as Cramer put it. And its exposure to the dreadful automotive and residential construction industries is minimal to boot. (Contrast that with Timken , another ball-bearing maker that’s got wind exposure but is also heavily levered to autos).
Granted, Kaydon looks expensive. The stock's trading around its 52-week high, but Cramer thinks the share price can still go much higher. He doesn’t think the earnings take into account just how strong the wind component could be. When the big analysts catch on, that should be a good catalyst as well.
Wind is in, and Kaydon’s just one of the companies that’s making it possible.
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