The bull market in infrastructure and machinery and great international exposure should carry construction-equipment maker Terex to $120, Cramer said.
This is his last $80-to-$120 pick of the week. His theory is based on the idea that large-cap companies in a bull market that make it to $80 a share should make it to $120. The stocks get a boost from institutional investors looking for solid buys. So far Cramer’s picks are up an average of 5.2% in the one to four days since he made his calls.
Some might think that Terex could never compete with the likes of Caterpillar and Komatsu, but it doesn’t have to, Cramer said. A lot of Terex’s operations are in areas that CAT doesn’t operate (aerial platforms) or where there’s plenty of business to go around (cranes). And aerial work platforms, cranes and mining equipment together make up 70% of sales and 90% of profits at Terex.
There’s a possibility an acquisition could help things along too. It looks likes Terex is the frontrunner to buy Bobcat from Ingersoll Rand. The deal would be great for TEX’s compact construction equipment business, Cramer said, and that’s where some of the stiffest competition is.
Bottom Line: Cramer thinks TEX is going to $120. It’s part of one of the hottest bull markets around, and there’s a catalyst. With the performance of the other members of the $80-to-$120 club, how can you resist?
Questions for Cramer?
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