Cramer: It's Time To Buy Barnes
Cramer made a few great calls on Haynes International, Brushed Engineered Materials and Johnson Controls, and now he thinks it’s time for a not-too-distant relative to enjoy a similar run: Barnes Group.
Barnes is a precision metal components maker that’s right on the middle of a bull market in aerospace. Judging from what Genesis Lease CEO John McMahon told Cramer last week on Mad Money, that planes should remain in short supply for years, business should be good for the Barnes boys.
The stock is cheap, too. It trades at 16 times this year’s earnings and 14 times next year’s earning on 32% growth. Stocks this good rarely trade below their growth rate, Cramer says, and when they do they don’t stay down there for long.
The other side of this story is Barnes’ exposure to trucks. It’s a very small piece of Barnes’ industrial business, but Cramer thinks it has the potential to raise numbers. Just look at Cummins, which was upgraded last week on the strength of truck engines sales.
(Some of you loyal Home Gamers might remember Cramer recommending this stock during the Indiana University Back to School Tour show. Cummins is up 36% since then.)
Barnes makes springs that are integrated into heavy machinery, so if sales are as strong as Cummins indicates, then this business could add a bit to Barnes’ earnings, Cramer says, enough to push them even higher than the future upside surprise he’s already expecting from aerospace.
Bottom Line: Cramer hopes you made some money in Johnson Controls, in Haynes International and in Brush Engineered Materials. Now it's Barnes' turn - time to buy B.
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