Jim Cramer's Mad Money Stock Recap July 31st
Getting Defensive: Alliant Techsystems Inc. (NYSE: ATK - News)
Cramer expressed his hope that viewers took advanatage of Tuesday's morning upsurge to sell financials, brokers and housing stocks and to invest in his six wild bull markets: aerospace, minerals, infrastructure, oil, agriculture and machinery. He added a seventh wild bull market to the list: defense. Cramer believes the U.S. will be in Iraq for a long time, because both parties want to prove they are tough on security. He discussed three things that characterize a good defense stock: it's cheap, it's mostly levered to defense, and it's a U.S. company. Cramer's second favorite defense stock is ATK, a lead play which is "in almost every single projectile that the U.S. can launch at an enemy, be it a bullet or a tank round" and derives 86% of its sales from defense. ATK is cheap with an 11% long-term growth rate, and a 14.4x multiple. He added ATK is buying so much stock, it seems to be taking itself private. ATK bought back 10% of its own company last year, and a substantial increase in its orders, Cramer thinks an upside surprise is in store. He would buy half a position before and half after the company's earnings report.
Pull the Trigger on Raytheon (NYSE: RTN - News)
Cramer's favorite defense stock is RTN which is 95% levered to defense. It is cheap, with a 16x growth rate, and RTN sells as just 15x earnings; "It's just plain undervalued," Cramer remarked. RTN just won two major contracts and raised its guidance by 20 cents. In addition, RTN has been buying back stock aggressively and still has $611 million left in the repurchase authorization.
Related: Scott Sacknoff notes P/E is not the only consideration when looking at defense stocks.
CEO Interview: David Wenner B&G Foods (NYSE: BGS - News)
David Wenner discussed the company's strategy of revamping small, overlooked brands; "We focus on them and are typically successful in turning them around." Cramer recommended BGS for those who are worried about the pain caused by mortgages.
Published By SeekingAlpha
Cramer expressed his hope that viewers took advanatage of Tuesday's morning upsurge to sell financials, brokers and housing stocks and to invest in his six wild bull markets: aerospace, minerals, infrastructure, oil, agriculture and machinery. He added a seventh wild bull market to the list: defense. Cramer believes the U.S. will be in Iraq for a long time, because both parties want to prove they are tough on security. He discussed three things that characterize a good defense stock: it's cheap, it's mostly levered to defense, and it's a U.S. company. Cramer's second favorite defense stock is ATK, a lead play which is "in almost every single projectile that the U.S. can launch at an enemy, be it a bullet or a tank round" and derives 86% of its sales from defense. ATK is cheap with an 11% long-term growth rate, and a 14.4x multiple. He added ATK is buying so much stock, it seems to be taking itself private. ATK bought back 10% of its own company last year, and a substantial increase in its orders, Cramer thinks an upside surprise is in store. He would buy half a position before and half after the company's earnings report.
Pull the Trigger on Raytheon (NYSE: RTN - News)
Cramer's favorite defense stock is RTN which is 95% levered to defense. It is cheap, with a 16x growth rate, and RTN sells as just 15x earnings; "It's just plain undervalued," Cramer remarked. RTN just won two major contracts and raised its guidance by 20 cents. In addition, RTN has been buying back stock aggressively and still has $611 million left in the repurchase authorization.
Related: Scott Sacknoff notes P/E is not the only consideration when looking at defense stocks.
CEO Interview: David Wenner B&G Foods (NYSE: BGS - News)
David Wenner discussed the company's strategy of revamping small, overlooked brands; "We focus on them and are typically successful in turning them around." Cramer recommended BGS for those who are worried about the pain caused by mortgages.
Published By SeekingAlpha
Labels: ATK, BGS, Jim Cramer, Mad Money, RTN
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