Jim Cramer Put These 17 Stocks Under a Microscope

8. Babcock & Wilcox Enterprises, Inc. (NYSE:BW)

Number of Hedge Fund Holders: 16

Babcock & Wilcox Enterprises, Inc. (NYSE:BW) is one of the stocks Jim Cramer put under a microscope. Cramer highlighted that the company is “racking up a lot of new business,” as he commented:

“10 years ago, Babcock & Wilcox split again. This time… it spun off its commercial power business as Babcock and Wilcox Enterprises, and that is the company I got a call about last night, while the defense and nuclear business changed its name to BWX Technologies. And I gotta tell you, I think both of these companies have a lot going for them these days. I just wish the darn stocks weren’t so high… In the end, though, the stocks had a pretty extreme run while Babcock & Wilcox is racking up a lot of new business, which is impressive for a company with a $923 million market cap… It’s highly speculative. It certainly doesn’t help that this company’s currently losing a lot of money, still has a lot of debt. Plus, there are big projects, and we don’t even know if Babcock & Wilcox can deliver. So, it’s worth your attention, but I wouldn’t buy it even for speculation until the stock cools off…

BWX has really cleaned up over the past few years. In 2024, the Navy rolled out a 30-year shipbuilding plan that included a lot of investment in nuclear-powered subs and aircraft carriers. That’s decades of growth for these guys. Meanwhile, the commercial nuclear industry has come back really from the dead, thanks to all these power-hungry data centers… Because these projects are so long-term… a lot of visibility into the company’s growth many, many years into the future, and the long-term earnings are looking pretty, pretty good. Of course, a lot of that’s baked into the stock, though… At these levels, BWX trades at nearly 50 times this year’s earnings estimates. That’s too rich for me.

Good story, but you need to wait for a major pullback or rapid acceleration in BWX’s earnings growth to justify the sky-high valuation… Babcock & Wilcox is pure speculation. I think it’s too expensive for the moment. BWX, much less speculative, also very expensive.”

Babcock & Wilcox Enterprises, Inc. (NYSE:BW) provides energy and emission control solutions through technologies focused on waste-to-energy conversion, hydrogen production, and carbon management.