When the Fed starts aggressively cutting, it won’t just be the financials that benefit. The industrials should come back too, Cramer said.
Cramer recommended Terex , the third-largest construction and mining equipment maker in the world. TEX is making money hand over first from the global construction boom but the stock has been taken down thanks to domestic weakness. That is wrong, Cramer said. Terex does two-thirds of its business outside of North America.
It all comes down to safety. Terex is safer than rival Caterpillar thanks to a massive $700 million buyback with $500 million left in authorization. There’s also some encouraging insider buying from the COO and a director.
Terex is cheap, too, which probably explains why the insiders are scooping it up in droves. Down a whopping 40% in three months, the stock is priced for a depression, Cramer said. The reason it got knocked down was because it missed earnings by two cents last quarter, even as it reaffirmed guidance. A two-cent miss doesn’t justify a 30-point drop as far as Cramer is concerned, especially with rate cuts increasingly likely.
The company also has a hidden gem in its aerial work platforms business that Cramer expects could be big. Analysts are expecting a decline this business but United Rentals, the leader in the space, just announced it would increase expenditures this year. That could mean some unexpected upside for Terex.
The bottom line? Terex is among the safest in a group of stocks that will benefit when the Fed starts easing.
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