Cramer's Mad Money - The Contrarian Military Play (5/29/13)

Includes: EAC, F, HON, NOC, NUE, PG, SFD, SPR
by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday May 29.

Northrop Grumman (NYSE:NOC). Other stocks mentioned: Honeywell (NYSE:HON), Spirit AeroSystems (NYSE:SPR), Erickson Air-Crane (NASDAQ:EAC), Ford (NYSE:F), Smithfield Foods (NYSE:SFD)

The military-levered stocks have experienced a counterintuitive rally. Many were so worried about sequestration that they felt the sector was left for dead. However, defense stocks have been roaring, most up in the double digits. Northrop Grumman (NOC) is now just a few points off its 52 week high and received an upgrade from Citigroup. Cramer would consider buying NOC on weakness and would be more cautious about smaller players.

Cramer took some calls:

Honeywell (HON) is a great buy regardless of whether the stock splits or not.

Spirit AeroSystems (SPR) is not a stock to sell.

Erickson Air-Crane (EAC) it is down too much and may be a Buy idea.

Ford (F) is a decent buy if it goes to $18. If Europe bottoms, Ford is worth buying.

Smithfield Foods (SFD) could get a higher bid, but it is worth it to take profits.

CEO interview: Dan DiMicco, Nucor (NYSE:NUE)

Nucor (NUE) is benefiting from the U.S. domestic natural gas drilling boom. "We aren't against exports," said CEO Dan DiMicco, but he stated that the fuel could have many uses in the U.S. The CEO discussed the fact that industry is picking up, but steel hasn't moved as much as he would like. "I remain bullish," said Cramer, "but his comments about steel have me a bit worried."

Procter & Gamble (NYSE:PG)

Cramer thinks that Procter & Gamble (PG) is a Sell, not only because packaged goods stocks have run a lot, but because its old CEO is coming back. While Cramer had many complaints with CEO Bob McDonald, many of his problems were inherited from A.G. Lafley, who is returning as CEO. McDonald at least tried to trim the fat Lafley left, but with Lafley back in, Cramer would sell PG and buy other stocks in the sector.


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