Mad Money

2 Bold Calls from Eaton CEO Sandy Cutler

Eaton Corp: A Look Behind the Earnings

Eaton CEO Sandy Cutler made two bold calls on Monday's "Mad Money."

To start, the 59-year-old executive said China's soft landing. In an effort to cool its red-hot economy, the People's Republic had tightened interest rates and pulled back credit. Along the way, people worried the Chinese government may go too far. Cutler is bullish on China, though. After all, the country's vast manufacturing sector expanded moderately in October to snap three months of contraction, reflecting the resilience of robust domestic demand that is likely to soothe fears of an abrupt slowdown in the world's second-largest economy. HSBC's flash purchasing managers' index (PMI) also showed price pressures eased in China, underlining consumer price data that has shown a slight pullback in inflation from three-year peaks. The flash PMI, designed to give an early snapshot of the month's factory activity, rose to 51.1 in October from September's final reading of 49.9 as new orders and new export orders expanded. The reading surpassed the 50-point level demarcating expansion from contraction for the first time since June, when the PMI was 51.6.

Next, Cutler said non-residential construction in the U.S. has bottomed. Numbers were up in the second quarter and continued to climb in the third quarter. With Eaton's big bookings up by more than 20 percent, Cutler said the commercial-side of construction is showing significant strength.

These developments bode well for the Cleveland, Ohio-based company . Cramer remains bullish on ETN. He likes its 3.2 percent dividend yield. Currently selling at 9.7 times next year's earnings, he thinks it's cheap, too.

Watch Cramer's full interview with Eaton CEO Sandy Cutler here.

When this story was published, Cramer's charitable trust owned Eaton.

—Reuters contributed to this report.

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