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Trading the Aerospace Bull Market

When it comes to great American manufacturers, Cramer definitely endorses Honeywell International, a diversified outfit that makes everything from aircraft engines and avionics components to high-performance specialty materials and auto parts. There’s also a heating, ventilation and air-conditioning segment in here as well, and a security-systems division, too.

How do so many seemingly disparate pieces come together to make a viable business? Honeywell’s ability to service several sectors is like a “beautiful webbed mosaic,” Cramer said, where each piece works together to form a better company.

Fifty-five percent of sales come from early-cycle businesses, which are those that do well when we’re coming out of a recession, like specialty chemicals and car parts. But Honeywell’s late-cycle businesses, such as aerospace and security systems, cause earnings to explode higher as the world’s economies heat up.

Cramer’s especially bullish on Honeywell’s aerospace exposure. As he mentioned once already on Wednesday, the launch of the Boeing 787 Dreamliner has launched a seven-year rally in that sector. How does he know it’ll last that long? Because aerospace up-cycles typically do, he said. And because Honeywell has commanding market-share presence inside this long-awaited plane—it makes numerous parts for the 787, including its flight-control system—the stock makes for a likely play on its success.

Of course, Cramer endorsed buying Boeing, too, if you want to play aerospace. He has been, and continues to be, bullish on this company. He recommended using any short-term hiccups in 787 production delays, which could hit BA’s share price, to build a position in this name. Those hiccups won’t ruin the thesis, he said. They’ll just create opportunities to buy more.

“America is still a great manufacturing nation, and Honeywell and Boeing are two of our greatest manufacturers,” Cramer said. “Add them to your industrial shopping list to be bought on any market weakness.”

When this story published, Cramer’s charitable trust owned Boeing and Honeywell International.

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