Buy Stanley Black & Decker ahead of its January earnings call, Cramer told viewers during Friday’s “Mad Money.” That catalyst, or the company’s analyst meeting shortly thereafter, could boost the stock price.
When those events arrive, investors will be looking for news of Stanley’s continuing synergies with Black & Decker, which was bought in March. The newly combined company brought some of the best-known brands in the hand-tool, commercial and do-it-yourself businesses—Stanley, Bostitch, Best, Black & Decker, DeWalt, and Baldwin—under one roof. With Stanley’s solid management and Black & Decker’s great brands, global reach and scale and diversified product line, the new venture controls a virtual monopoly in the sector.
“Stanley Black & Decker thoroughly dominates the industry,” Cramer said, “an industry that’s coming back with a vengeance here in the United States as more and more Americans try to fix up their homes because there are actually buyers out there now, even if I’m practically the only person in the media who will admit it.”
Stanley management had originally expected $350 million in annual cost savings by the third year after the March deal closing, but now they’re predicting closer to $400 million. Cramer thinks that number could go even higher as time goes on, and he said the company should realize these savings sooner than anticipated. And that’s not even counting all the revenue synergies from cross-selling, expanded distribution and the increased scale in fast-growing emerging markets where Black & Decker has a lot of exposure.
Management said it will offer more details on the synergies during either its January earnings call or its analyst meeting, which follows soon after. If the news is good, and likely it should be, shareholders will be rewarded. That’s why Cramer wants investors in ahead of the announcement.
“Talk about major catalyst for the stock,” he said, “one that I think could send the stock soaring, maybe even to the $70s.”
When this story published, Cramer's charitable trust owned Stanley Black & Decker.
Call Cramer: 1-800-743-CNBC
Questions for Cramer? firstname.lastname@example.org
Questions, comments, suggestions for the Mad Money website? email@example.com