Jim Cramer, portfolio manager of the Action Alerts PLUS charitable trust portfolio, and research director Jack Mohr discuss why they recently initiated Lockheed Martin (LMT). Mohr says although they already own Honeywell (HON), they wanted 'more direct exposure' in the aerospace and defense sector. Cramer says the macro story is important, explaining that 'the United States has withdrawn from being the world's policeman...[and countries that are hotspots] don't have the U.S. protection anymore so what do you do? You have to arm yourself. Who do you call? You don't call Russian arms dealers or even French. You go to Lockheed Martin, General Dynamics (GD) and you go to Northrop Grumman (NOC) maybe you go to Textron (TXT), Raytheon (RTN) is good too but Lockheed Martin has some particular financial characteristics that we love.' Jack Mohr says, 'their cash flow generation is 115 percent of their net income...and then they take that cash flow....they give it back to the shareholders. They're committing to return at least 8 percent of their market cap each year...that's unbelievable.' Cramer says other than AutoZone, he's never seen anything like it. Cramer concludes, 'Lockheed Martin is so good into this weakness, it's in its own personal bull market.' Shares of LMT are up about 7 percent year-to-date.
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