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War Machines

Tuesday, 25 Mar 2008 | 6:54 PM ET
Cramer on TXT
Investing in Textron, with Mad Money host Jim Cramer.

Gen. David H. Petraeus, senior commander in Iraq, recommended President Bush maintain the present troop levels there, the New York Times reported Tuesday. If the president follows his general’s advice, as Bush has said he’d do, those troops will need a steady replenishment of equipment. That’s where Textron comes in.

Textron’s involved in a number of businesses, but almost 30% of sales comes from its military division. The company supplies the U.S. armed forces with airplanes, helicopters and everything from networked sensors to precision weapons. So a protracted war – and sustained troop levels – in Iraq means big business for Textron.

The stock’s down, though. Apparently, Wall Street’s worried about TXT’s financial division. But Cramer isn’t, especially since that business only made up about 7% of 2007 revenues. And Textron’s loans are going to the people buying the company’s Cessna jets. So if anything this is a chance to get a great stock on the cheap.

Just in case you need even more proof that Textron works in this tough market, the company’s industrial division – maker of fuel systems, power equipment measuring instruments and more – is watching its sector peers hit 52-week highs. And this is 26% of Textron’s business.

Want Cramer’s call on Raytheon’s new weapons? What does he think about DynCorp International in a crowded defense market? Watch the video.

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com

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