Cramer's Next Energy-Efficient Play--Navistar (NAVZ)

May 21, 2008 9:26 AM EDT

Last night on Mad Money, Jim Cramer highlighted Navistar (OTC: NAVZ) for a variety of reasons, but most importantly, he believes there is an immediate catalyst that will take Navistar higher, we will get to that in a minute.

Navistar is a market leader when it comes to fuel-efficient trucks along with Cramer's favorite engine play Cummins (NYSE: CMI).

Jim likes Navistar's pipeline of environmentally friendly power-saving products like an auxiliary power unit that helps trucks producer power without idling the engine. Navistar manufactures fuel-efficient school trucks and buses. It has a new hybrid diesel engines that claim fuel savings of 9%-13% over traditional engines. It also has a growing military arm, where it manufactures mine-resistant vehicles. The company said this could become a $2 billion business.

Now, to the catalyst that I mentioned earlier. Cramer said that Navistar is expected to relist on the New York Stock Exchange soon. Navistar was delisted from NYSE back in '05 for accounting issues, but Cramer said the company's accounting problems are now behind NAVZ. Cramer compared Navistar to Terex (NYSE: TEX), whose shares more than doubled after accounting issues were resolved.

Cramer said once the company gets relisted on the exchange, the big institutional money will return again, which will bring a higher stock price. Navistar trades only at 7.7 times its forward earnings, and Cramer said Navistar could trade at an 11.6 multiple, taking it over $100 for a 51% gain.

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