• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Industrials

Jim Cramer: Good Cyclical Stocks to Buy Are in Short Supply

These stocks remain among the best places to be.
By JIM CRAMER
Dec 18, 2017 Updated Dec 18, 2017 | 01:20 PM EST
Stocks quotes in this article: URI, CAT, TEX, MTW, DHR, FTV, PNR, ETN, EMR, MMM, PH, IR, ITW, CMI, BA, UTX, HON, WY, DWDP, IP, WLKP, LYB, CSX, NSC

There's a shortage of good cyclical stocks. I never thought I would write that but because we have had such a prolonged period of slow growth most of the cyclicals seem to have fallen by the wayside or merged.

Why do we think that Caterpillar (CAT) and United Rentals (URI) , which is on Mad Money tonight, are so strong?

Simple, we just don't have enough construction equipment companies to own. Sure we can buy Terex (TEX) but that's just too iffy a balance sheet. Plus it has a huge worldwide base and we really would prefer to buy American. We can buy Manitowoc (MTW) , a premier crane company, but that, too doesn't have all that much that is American and it is an American boom.

The old standbys, Illinois Tool Works (ITW) , Ingersoll Rand (IR) , Parker Hannifin (PH) , 3M (MMM) , Emerson (EMR) and Eaton (ETN) have run so much it is tough to touch them. But touch them you may have to. Don't forget Pentair (PNR) , a water cyclical split up or Fortive (FTV) ,  the spinoff from Danaher (DHR) .

There's Cummins (CMI) , the engine company, which subs for Caterpillar as an American/ Chinese hybrid. It's a good stand-in and I know it could go higher but it is subject to endless downgrading over month to month track sales. I hate that hedge fund game but it is a regular event with this one.

And of course there's United Techonologies (UTX) and Boeing (BA) , both of which won't quit. The have fabulous stories, as does Honeywell (HON) , a new addition to the recommended list of ActionAlertsPlus.com. Anything with aerospace just has a predilection to go higher.

All of these companies are consistent buyers, not issuers of stock. They husband it unlike the west coast tech culture of endless giveaways that make it so their supply is always bloated and against you.

It is so hard to find stock in any of these that it is amazing they all aren't higher. But then again, it is a little bit of a leap of faith to think that they are all going to blow away numbers. After listening to Mike Kneeland from United Rentals, though, I do think that upside surprises to await us.

Of course there are other ways to invest in the growth thesis. The papers, for example, but there, again, there used to be tons of them. No more. You buy International Paper (IP) . The chemicals of which there are a ton but the one that is top of mind is DowDupont (DWDP) . People love Westlake (WLKP) and LyondellBasell (LYB) . But, in many ways, that, too, feels like supply shortage, meaning a stock shortage, not a chemical shortage. Same goes for Weyerhaeuser (WY) a lonely lumber story.

Then, of course, you could go downscale and pick on Freeport McMoran FCX as a copper chit in the big scene. However, you have, again, to deal with China and I think that's not the cup of tea of this market. Oh and why not focus on the rails? Not CSX (CSX) , let it settle. But Norfolk Southern (NSC) ? Union Pacific UNP? I am fine with that.

Now of course I am generalizing. There are more industrials out there to pick up. Plus we know that you don't need to own all. You pick your faves but many of these stocks have leverage to every single initiative that Washington has given us including repatriation, quick write-offs of capital equipment and, of course, corporate tax reform.

What will they do with the money? Buy back stock? Bigger dividends? More hiring? More capital equipment? Does it matter? All are fabulous for shareholders.

But the best thing of all? We used to have hundreds of these kinds of companies. Now there are just dozens. And that, alone, assures you that they simply aren't done. They remain among the best places to be.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.


At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long DWDP, HON, DHR and ITW.

TAGS: Investing | U.S. Equity | Regulation | Markets | Industrials | Basic Materials | Transportation | Economy | Jim Cramer | Politics | Stocks

More from Industrials

Jim Cramer: Ready, Set, Go!

Jim Cramer
Jan 26, 2021 1:30 PM EST

Here's why you should wait for a dip -- not the vaccine glut -- to start buying.

General Electric Isn't Out of the Woods Yet, Here's How I'd Trade it

Stephen Guilfoyle
Jan 25, 2021 11:30 AM EST

GE remains a cash flow based story, but I see two negatives.

Be a Scale Up Seller of Quanta Services

Bruce Kamich
Jan 20, 2021 1:58 PM EST

Let's check the charts and indicators.

3M and Mastercard Continue to Trade Sideways

Bruce Kamich
Jan 20, 2021 10:55 AM EST

Both stocks may eventually do better when investors sense that the economy is indeed going to do better.

At What Price Is Ballard Power Systems a Buy?

Bruce Kamich
Jan 15, 2021 3:09 PM EST

Let's check out the latest charts of BLDP.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 09:35 AM EST CHRIS VERSACE

    Another Big Winner for Stocks Under $10

    We're ringing the register Tuesday morning.
  • 08:05 AM EST GARY BERMAN

    Tuesday Morning Fibocall for 1/26/2021

    SPX (Long-Term View) The 1/21/21 NEW high @ 3861...
  • 09:52 AM EST GARY BERMAN

    INDU/DIA 20 DMA

    Fibocall: The DIA has the 20 DMA @ 307.81 and w...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login