The current macroeconomic environment makes it difficult for CNBC's Jim Cramer to recommend even a best-of-breed stock like Emerson Electric, he said Wednesday after a solid trading session in the stock market.
An old-line manufacturer involved in the industrial automation, fluid handling, climate control and oil and gas spaces, Emerson has been at the center of a bull-bear dispute on Wall Street.
The bull thesis argues that Emerson's energy exposure could eventually benefit it once oil prices bottom, and that its top-notch management should be able to weather any oncoming storms while boosting margins. The bear thesis, however, forecasts slowdowns in Emersons automation, energy and China-tied businesses and increased uncertainty in 2019.
Even though his charitable trust used to own shares of Emerson, Cramer, host of "Mad Money," sympathized with the bear case.
"A lot of things need to go right for this stock to make sense — we need a deal with China, we need oil prices to rebound, we need the global economy to reaccelerate," he said. "If Emerson were genuinely cheap, … I'd feel more confident, but it sells for 15 times next year's earnings estimates. That's a slight premium to the average stock in the S&P 500."
"Between the oil exposure and the China exposure, I think it's too soon to buy an industrial like Emerson Electric, even though I like this company so much, even as it's one of the best of the best," Cramer concluded. "It just swings too much with the on-again, off-again trade talks. I recommend staying on the sidelines for now. Emerson reports on Feb. 5. I hope they tell a good story, but hope is not part of the equation."