Monday, November 17, 2008

My favorite stock gets the Jim Cramer treatment!

Full article on The Street

When it comes to ethanol, Cramer made it no secret he's not a fan of the commodity, nor the companies that make it.

But with the collapse of Verasun Energy (VSUN Quote - Cramer on VSUN - Stock Picks), along with several other ethanol stocks, Cramer's changed his tune on Archer Daniels Midland (ADM Quote - Cramer on ADM - Stock Picks).

Cramer said when all of the weak players get washed out of an industry, the last man standing usually wins. In this case, with just about all of the smaller ethanol companies now bought or bankrupt, ADM stands alone as a giant in the ethanol industry. Add that to an Obama presidency that heavily favors ethanol, and Cramer sees dollar signs.

Cramer said ADM is a huge buy based on its enormous size and global reach. He said in the biofuel business, size really does matter, and with its international business model, ADM is in the unique position of being able to shift its end product production to meet global demands.

For example, he said, now that ethanol is back in vogue in the U.S., ADM is shifting some of its corn syrup production back to ethanol to meet increased demand. Likewise, the company has the ability to weather disruptions in crop production by shifting supplies around the world.

Cramer said he's also a fan of ADM's bioplastics division, which makes bio-based plastics for plates, containers, utensils, coatings and other products.

When you put all of the pieces together, ADM is a buy, said Cramer.

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