Cramer Calls Masco (MAS) Best-of-Breed Play on Housing Recovery

On last night's Mad Money, Jim Cramer spotlighted what he calls "the best early-cycle play out there": Masco (NYSE: MAS).

A maker and installer of kitchen cabinets and plumbing products, as well as owner of the Behr paint brand, Cramer believes Masco is a play on the approaching bottom in the housing market. Cramer believes Masco is the best-of-breed way to play the early cycle as about 37% of its earnings come from new homes and 40% come from remodeling projects.

Although Masco has risen more than 35% since hitting a new 52-week low of $13.50 in mid-July, the President of Cramerica said he sees "only upside potential" and believes that the market has already priced in lower housing starts.

Turning to fundamentals, Cramer said he likes Masco's 4.9% dividend yield, which compensates patient investors to wait for the return of housing, as well as the company's stellar cash flow, which comes in at 3x earnings. Finally, Jim pointed out that Masco has about 33 million shares left under its buyback program, meaning that management will be purchasing shares if the price does drop.

With shares of Masco recently beaten down by analyst downgrades due to the current market turmoil, Cramer believes "Masco is exactly the kind of company investors should be looking for."

In pre-market trading, shares of Masco last traded at $18.10, up 3.8% from yesterday's close. While the broader markets are trading higher this morning on news that Warren Buffett has taken a $5 billion stake in Goldman Sachs (NYSE: GS), Masco's move this morning can still probably be attributed to Cramer's tout last night.

Masco Corporation manufactures, distributes, and installs home improvement and building products in North America and internationally.

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