Jim Cramer knows that defense contractors are in a position to benefit under Donald Trump's administration, but he says that Kratos Defense and Security Systems is right in the sweet spot and ready to roar higher.
Kratos is mainly involved in making unmanned systems, the kind used for targeting for drones, along with microwave electronics, electronic warfare, military-grade cybersecurity, satellite communications, missile defense and combat systems.
Most of its work is performed on a military base, in a secure facility or at a central intelligence location. Basically, it is focused on the most cutting-edge technology.
It is also too small and too low-profile to get the attention of Trump, which is the reason the speculative stock is up 48 percent since the election.
"The move here is logical, but at these levels, I would recommend staying on the sidelines. I hate to chase and that is what you would be doing if we buy Kratos up here," the "Mad Money" host said.
However, on a significant pullback or clarity on Trump's defense spending, Cramer said to be prepared to pounce on Kratos.
Taser is the company known for non-lethal stun guns used by law enforcement. With the stock up more than 12 percent this year and 75 percent in the past year.
Cramer attributed some of the strength behind Taser to it expanding into new areas. Taser makes technology to capture evidence, including body cameras and audio recorders and sells evidence management software to help police and prosecutors store and compile data.
Cramer spoke with Taser's CEO Rick Smith, who said he plans to expand the technology to help police offers transcribe reports.
"The average police officer spends two-thirds of their day sitting at a keyboard typing. We believe the technology is there today that police reports should be recorded, not written by some cop on a keyboard. We've got the video. Let's transcribe it and make the police report from there," Smith said.
Cramer thinks the averages could continue to roar higher next week, but recommended keeping one eye on tweets from President Donald Trump, and the other on earnings.
"Remember, if rates are up and oil is up, then the tone of the tape will be positive," Cramer said.
That should free up investors to trade some of the names on Cramer's radar next week. He outlined some of the stocks he will be watching:
T-Mobile: Cramer is willing to bet that CEO John Legere will deliver a strong quarter. He thinks the company can keep its momentum going without having to merge with another company.
"Be aware that there have been occasions where T-Mobile has reported a blowout quarter and the stock has sold off," Cramer said.
Diamondback: With the fastest growth of any of the Texas oil plays, Cramer said this stock will work as a trade.