Playing the Earnings-Expectations Game

Some companies beat earnings estimates so consistently they bring better-than-expected quarterly reports to an art form, Cramer said during Monday's Mad Money.

Take Teledyne, for instance. Over the past two years, this company has beat by an average of 15% every quarter. Cramer attributed the success to a smart acquisition strategy and Teledyne's connection to aerospace and defense and oil, two raging bull markets.

Teledyne accelerates its growth by identifying smart, bolt-on acquisitions that give the company more products to offer in the businesses where it already operates -- electronics and communications, systems engineering solutions, aerospace engines and components, and energy systems. It's a terrific strategy, Cramer said, that should get easier to pull off because there are fewer buyers in this tough financial environment. That means Teledyne will pay less for these already-profitable companies.

The stock's cheap, too. Trading at 18 times forward earnings, Teledyne has a 16% long-term growth rate. (Remember Cramer's definition of cheap: when the price-to-earnings ratio is equal or close to the long-term growth rate.) Still, Cramer said he thinks buyers will get TDY even cheaper if they wait for another pullback.

Ansys might be even better, though. This engineering-software company has either met or beat consensus estimates for every quarter over the past 10 years. In fact, Ansys has only missed the quarter once since it came public. The fourth and first quarters traditionally have been strong, so Cramer said he doesn't see the trend stopping any time soon.

Ansys should stay afloat without much trouble if the U.S. economy continues to lag since 65% of the company's business comes from overseas. And 68% of Ansys' revenue is recurring, which gives the stock great earnings visibility over the long term. Unlike Teledyne, though, ANSS is not cheap. It trades at 29 times earnings with a 19% growth rate. But Ansys is cheaper than competitors like MSC Systems and Dassault , and because this is a growth business, Cramer said he thinks ANSS deserves a higher multiple.

Teledyne and Ansys have delivered earnings beats so regularly, it'd be shocking to see them do anything else, Cramer said. And even if they didn't have such great track records, these two stocks would still be worth owning.

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