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Cramer: Could pullback make a terrific entry point?

After reporting a mixed quarter, investors shunned this stock. Jim Cramer, however, isn't necessarily one of them

He can't help but wonder if the pullback is actually making a terrific entry point.

The stock in question is Eaton, a maker of electrical control products, power management systems, hydraulics, truck transmissions and aerospace components.

Looking at the headline results, the decline may surprise you.

"The company earned $1.01 per share, a one penny beat, on in-line revenues that rose 3.4% year over year, with the terrific strength of their electric business offsetting weakness elsewhere," Cramer said.




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However, investors sent shares almost 3% lower, due to weaker than expected guidance.

Specifically, Eaton projected second-quarter operating earnings in a range of $1.05 to $1.15 per share. Analysts had estimated $1.29 per share.

Although the guidance is nothing to write home about, it doesn't spook Cramer. "Part of the weakness is due to an unexpected $40 million restructuring effort in its hydraulics business," Cramer said.

Cramer believes that kind of one-time expense pales when compared to the long-term opportunity facing Eaton shareholders.

"When the global economy starts picking up speed, and I think that's happening right now, then you want to own an industrial like Eaton," Cramer said.

That's because Cramer believes money managers will rotate into cyclical stocks, especially industrials such as Eaton, in an attempt to leverage the rebound.

"Eaton is the kind of company that really takes off when the economy improves, especially when we get the kind of rebound in non-residential construction that I expect to see this year," Cramer said.

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And over the long-term, Cramer believes business at Eaton is fundamentally sound.

"Organic growth was up 4%. That's the strongest we've seen in 2 years," said Eaton CEO Sandy Cutler during an interview on Mad Money.

As noted above, "I'm wondering if the pullback makes a terrific entry point," Cramer said. "I still believe in Eaton."

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