The federal program “Cash for Clunkers” may give rise to another stimulus effort, The New York Times reported, this time called “Cash for Caulkers.” Instead of taking environmentally unfriendly cars off the road, the new initiative would work to better weatherize homes, among other things. Cramer during Wednesday’s Mad Money said that a number of companies could benefit.
Former President Bill Clinton and Silicon Valley venture capitalist John Doerr each have proposed their own versions of a plan, both of which focus on some combination of energy efficiency and home upgrades. (Read the Times story for a full analysis of Clinton and Doerr’s proposals.) If the White House adopts something similar, Cramer said, then Cypress Semiconductor would be one way to play it.
The company’s Cypress Environsystems makes wireless devices to help save energy. Think remotely controlled thermostats to regulate temperature, as well as wireless gauge readers and battery monitors. Cramer said these new technologies were “a huge opportunity” before, but the potential government spending means they could be “even bigger.”
Also, while it may seem too obvious, nothing boosts energy efficiency like plain-old insulation. Owens Corning is the number-one seller in the US, and Cramer said the company could get “a huge boost” if Cash for Caulkers goes through.
If you need insulation, there’s a good chance you’ll buy it at Home Depot . Cramer disagreed with investors who sold the stock on Tuesday after what he called “a monster good quarter,” but that just offered the chance to buy HD at a discount. Cramer applauded the company’s restructuring and noted management’s specific mention yesterday of strength in do-it-yourself remodeling and energy-efficiency items.
The Caulkers proposal would also pay for upgrades to heating, ventilation and air-conditioning systems. Cramer said he likes Watsco as the best HVAC play because 85% of its business is residential. Plus, the stock pays a 3.6% dividend yield. Lennox International works, too, he said, though it’s a close second with 62% of sales coming from the residential market.
Cash for Caulkers could deliver a triple threat: create jobs, improve energy efficiency and save consumers money.
More importantly, though, Cramer said, “It could generate huge gains” in these stocks.
Cramer’s charitable trust owns Home Depot.
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