CNBC’s Jim Cramer said Thursday he sees a bull market in a couple of industries including agriculture, even as Wall Street remains concerned about signs of a slowing economy.
“I think we’ve got just a plethora of bull markets,” the “Mad Money” host said. He added that investors should “be ready to buy into the weakness” standout stocks within them if Wall Street on Friday is spooked by Federal Reserve Chair Jerome Powell, who is delivering highly anticipated speech at 10 a.m. ET.
“Another Fed-mandated meltdown could create some tremendous opportunities, but only if you know where to look,” Cramer said.
“A bull market of insane proportions” is taking place in the agriculture sector, Cramer contended Thursday, noting Deere & Co. saw a number of price-target hikes from analysts after the company reported earning last week.
“I have total faith that next year is going to be super for them,” Cramer said. “I’ve always liked the ag space because people have to eat, but there are times when farmers are over-planting and the group does poorly. This is not one of those times, which is why Deere could rally on its so-called poor quarter, and why it got more price-target boosts in response than any other company I can remember this earnings season.”
Cramer also pointed to fertilizer companies such as Mosaic, CF Industries and Nutrien. He noted all three companies still trade at single-digit forward price-to-earnings ratios, even after impressive year-to-date gains. Seed company Corteva commands “tremendous’ pricing power, he added.
Cramer said auto parts is one of his long-term favorite areas. AutoZone, in particular, is the company he likes best in the industry.
“This company had 30 million shares in 2016. Now it has less than 20 million shares. During this period, its market capizalation has grown from $21 billion to $43 billion. Now, there’s also Advance Auto Parts, but it missed last time out. I want to get in the Zone,” Cramer said.
Aerospace and defense
“It’s hard to tell because of the endless series of mishaps from Boeing, but there’s a bull market in aerospace and defense, too,” Cramer said, while pointing to Raytheon Technologies as one company to consider.
“Here’s a stock that seems almost chronically undervalued,” he said. “It’s up 12% for the year — pretty good versus the averages, but not so hot compared to the strength of its end markets.”
Cramer said the recently passed Inflation Reduction Act — specifically, it’s clean energy provisions — should provide a meaningful lift to the businesses of companies such as Generac.
“Generac-produced products can store solar power and help you sell your energy back to the grid while also charging your electric vehicle,” Cramer said.
“I know that the bill favors Plug Power for hydrogen vehicles, and it lowers the price so the company’s truly viable here,” he added. “And I’m intrigued about what the law may mean for Darling Ingredients, the ultimate recycler of all sorts of waste. After speaking with them, I believe they have a bright future, too.”
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