Cramer: Baldor Electrics (BEZ) is a Steal

Cramer recommended shares of Baldor Electric (NYSE: BEZ) on last night's Mad Money. Jim likes Baldor because it builds energy-efficient electric motors which can help companies lower their energy consumption, a trend that has quickly become very popular around corporate America today.

Cramer points out that Baldor receives about 63% of its revenues from its electric motor branch, 27% from its energy transmission equipment segment and 10% from its generators. Cramer believes Baldor's Super-E line of motors are the "key" to its success. Jim also feels the Energy Bill passed in 2007 is having a positive effect on Baldor as the bill calls for more energy efficient motors to be in place by 2010. As a result, the company has favorable visibility, projecting forecasts out as far as 2011.

With about 16% of its float shorted, Baldor has a good amount of bears following it, according to the Mad Money host. Contrarily, Cramer views this as a positive because many shorts are selling the stock due to its large debt position, but Cramer notes that Baldor's management has already been laying out plans to reduce the company's debt from 62% of capitalization to less than 30% of its cap.

Shares of Baldor currently trade at about 12.3x forward P/E, yet the stock is growing at 13.7% over 5-years. As a general rule, Cramer believes that if a stock trades at less than 2 times its growth rate, it could be getting attractive. Based on Baldor's current valuation, Cramer calls the stock "a steal."

Baldor Electric Company designs, manufactures, and markets industrial electric motors, power transmission products, drives, and generators.

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