"In the face of high expectations, the defense titan quite literally fired on all cylinders," Cramer and Mohr wrote in a note to subscribers Tuesday.
Lockheed Martin delivered top- and bottom-line beats. Second-quarter sales of $12.9 billion were above the consensus of $12.55 billion and earnings of $3.32 per share surpassed forecasts of $2.93. The company expects full-year fiscal 2016 earnings to range between $12.15 and $12.45 per share, up from $11.50 to $11.80.
The portfolio managers noted that LMT's strong aeronautics division with the F-35 fighter jet program drove $400 million in sales compared to a year earlier on increased volume. They also think the guidance may be conservative as it "simply adjusts for better-than-expected 2Q results rather than extrapolating the broad-based momentum into the back half of the year."
Cramer and Mohr expect the Leidos Holdings (LDOS) deal to unlock $5 billion in total value for shareholders. Lockheed Martin stock closed at $258.96 on Tuesday. Since the initial buy date of October 2015, the AAP holding has gained nearly 24%.
Meanwhile, Stocks Under $10 holding Synovus Financial (SNV) also beat consensus estimates. The Columbus, Ga.-based bank reported adjusted diluted earnings of $0.49 per share, which topped forecasts by $0.02. Total revenues of $289.3 million grew 7% from a year prior and beat estimates of $288.9 million.
"The upside in the period was driven by operating leverage that management expects will improve the second half of the year," said portfolio manager David Peltier in a note to subscribers.
Peltier highlighted that the bank posted 7% year-over-year loan growth for the period and that credit-quality metrics improved. He also said he believes Synovus can continue to post above-average growth in the coming quarters.
Synovus stock closed at $30.44 after gaining 1.3% on the day. The Stocks Under $10 portfolio has seen its Synovus holding grow 36% since April 2013.