Cramer Finds the Fertilizer and Lithium Super Stock (AONE, HEV, SQM, ABAT, CBAK, ALTI, POT, MON)

The agricultural chemical and energy storage sectors have been red hot recently, and CNBC’s Jim Cramer found a stock to play both.

Buzz from the Detroit Auto Show has made its way to Wall Street, and stock picking guru Jim Cramer offered his opinion on the segment during Wednesday evening’s Mad Money TV and radio show. According to a recap on TheStreet.com, Cramer said batteries are the place to be in the parts segment, but he isn’t a fan of pure-plays A123 (AONE) and Ener1 (HEV). The former hedge fund manager noted that both companies have been propped up by millions in government funding, and still operate in a largely unproven business.

Instead of recommending another battery player, Cramer dug one step deeper, and came up with fertilizer company Sociedad Quimica y Minera (SQM), or Chemical & Mining of Chile. The relation to the energy storage segment is the company’s secondary operation in lithium, which TheStreet.com says accounts for about 30% of the company’s revenues.

Just run down some components of the Energy Storage and Battery Stocks Index to see how important lithium is to the sector. A123, Advanced Battery Technologies (ABAT), China BAK Battery (CBAK), and Altair Nanotechnologies (ALTI), just to name a few, all use lithium to some extent in the battery production process.

A look at the Agricultural Chemical and Fertilizer Stocks Index shows that SQM’s primary business as a producer of specialty plant nutrients is in a hot segment. Back in November, Cramer picked Potash (POT) and Monsanto (MON) as stocks that could benefit from a sector that was then “at a bottom worth playing.” As it turns out the Chinese ag stocks have outperformed, but it was hard to miss in the fertilizer segment over the last three months.

Cramer’s optimism on SQM is helping the stock today, and it will be interesting to see how his thesis plays out. Fertilizer and lithium are certainly a powerful one-two punch in this economy, and as of this writing, the Chile Stocks and ADRs Index has some serious momentum, outperforming the S&P 500 by more than 6% in the past month.

Investors can track the above Indexes for performance trends and a suite of other metrics at tickerspy.com.

Tags: ABAT, ALTI, AONE, CBAK, HEV, MON, POT, SQM