Cramer’s unexpected bull market

Cramer's committed to finding bull markets. And sometimes he spots them in the most unlikely places.

For example, take the defense contractors.

"That's got to be the most unexpected bull market of 2013," noted Cramer. Largely pros had expected stocks in this area of the market to languish or sell-off after sequester mandated spending cuts kicked in.

But most stocks in the space didn't sell-off; they didn't even languish.

Shares of Rockwell Collins, a maker of aviation electronics, have gained 22% ytd, while shares of General Dynamics, an aerospace and defense contractor, have gained 25% over the same period.

Adam Jeffery | CNBC

But those advances pale when compared to Exelis, the former defensive unit that was spun out of ITT in 2011. Shares of this company have rallied almost 50% ytd. "And with reinvested dividends the stock has given you a fabulous 66.8% return," Cramer added.

"This is a company that makes highly secure communications systems, electronic warfare equipment, radar and reconnaissance systems, night vision goggles, along with an information technology business where they design advanced networks and do air traffic control for the Federal Aviation Administration," Cramer explained.

Like so many other companies in this sector, management has navigated the spending cuts by transforming the company into a leaner and meaner operation.

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Going forward, Cramer sees plenty of reasons to remain bullish on Exelis.

"The company's expanding further overseas, moving into adjacent markets, and cutting costs to soften the blow from reduced defense spending here in the United States," Cramer said.

"Also, this $3.15 billion company has over $7 billion in proposals under evaluation," he added, "and its book to bill ratio came in at 1.09—meaning they have more business than they can actually handle. Also shares yield 2.5%."

All told, Cramer thinks both Exelis as well as the defense contractor cohort is worth a closer look. You may find there's a lot to like about this stock and this space.

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