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Why Raytheon's Under the Radar

Turns out the 2009 U.S. defense budget will be much higher than last year’s, a Washington Post article reported Monday. Of course, Cramer had to find a way for Homegamers to profit from it.

The article said President Bush will ask for $515 billion, 7.5% more than the 2008 total, and a significant amount more than Wall Street expected, Cramer pointed out during today’s show. Fred Kaplan at Slate is saying the figure is north of $700 billion. Either way, now analysts are slapping buy ratings on the companies poised to gain the most from the increased spending.

But they can’t recommend every one. To be overly bullish shows a lack of rigor, Cramer said, meaning even good stocks, like Raytheon, can be passed over. In fact, analysts will often sacrifice one stock for another because they feel they have to.

Defense is so hot RTN’s climbing anyway, though. Since Goldman Sachs’ sell call last March, the stock is up 25% compared with the S&P’s decline of 7%. The truth is, the sector’s rising tide is lifting all boats, even the shunned Raytheon. And that pariah status gives investors a chance to buy in cheap.

Buyers should wait for a pullback, though, Cramer said. There’s a chance you could get this great stock for even less.

Jim's charitable trust owns Goldman Sachs and Raytheon.

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    Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

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