Industrial stocks have been the big ugly ducklings of the stock market for ages. And if anyone would have told Jim Cramer 48 hours ago that a company would take a run at $75 billion United Technologies, he would have thought that was insane. But it happened, and it was a big wake-up call for Cramer.
Stocks sank on Tuesday after JPMorgan CEO Jamie Dimon said the bank has $44 billion in direct loan exposure to oil and gas, which put a new spin on the negatives of lower oil and gas prices.
"I didn't like anything about this discussion. JPMorgan reported a little more than a month ago. Why didn't they say something then? It's not like oil wasn't low in January," the "Mad Money" host said.
With oil and bank stocks hated badly in the market, Cramer was intrigued by industrials. When CNBC's David Faber broke news of a possible merger between Honeywell and United Technologies on Monday, it prompted Cramer to take a fresh look at the cohort.
The combination of the two companies would create a domination in two huge industries: aircraft and heating ventilation, and air conditioning.
The possible acquisition highlighted to Cramer that there is still life in the industrial sector if further merger and acquisition activity were to occur, which he found compelling.
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"No, I am not a fan of Caterpillar … but wait a second, if some company were big enough to take a run at this $38 billion behemoth that sells at almost half that it did not that long ago, doing so with a long view, I can see how that deal would make sense," Cramer said.
This might seem like a tall order, but Cramer is willing to consider that the industrials could make a turnaround.
"After the Honeywell-United Tech revelations, I think this market could suddenly get more positive on the once-shunned now-compelling on-the-way-down industrials that we had left for dead and buried under a Chinese wall just a few weeks ago," Cramer said.