This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Cramer: The Dreamliner Lifts Component Makers

Stocks in this article: BA ATI AA UTX PCP HXL BEAV HON GR GE

Please enjoy this free sample of our premium content featuring Jim Cramer. To get all of Cramer's premium content free for a limited time, please register here.

NEW YORK ( RealMoney) -- How much skepticism was there that the Dreamliner would ever launch? How much disbelief was there that Boeing (BA - Get Report) would ever get it right?

Obviously a ton, if you look at the stocks that are really rocking today. First, there's Allegheny Technologies (ATI - Get Report), which is one of the best horses to play in the Boeing race. Allegheny Tech makes the finest titanium, which is used principally for aircraft. The stock has been kept down forever, but I simply need to remind you that when the last aerospace cycle took off in 2005-6, you had a remarkable run in this stock. In fact it was, at one point, the best-performing stock in the S&P 500. It has a very, very far distance to go to get to where it used to be.

The Boeing Dreamliner finally comes out of the hangar

Second is Precision Castparts (PCP - Get Report). Here's the best-run aerospace play, having made a ton of money even when the Dreamliner was looking just like a dream. It is a name best played with deep-in-the-money calls, as it has virtually no dividend. The caveat is that the stock is expensive, selling at almost twice its growth rate, but I believe the numbers are way too low in the out-years, now that Boeing is shipping.

Here's an oddity: UBS downgraded Hexcel (HXL - Get Report) to sell last week, on the basis of worries about production cuts for both Boeing and Airbus. I don't buy it. I think the cycle is intact. Hexcel is a very important composites play for the Dreamliner, which, of course, is built with composites, which happened to be the big hold-up to the construction. That could be right, given the pressure on the downside that the sell call generated.

I like BE Aerospace (BEAV - Get Report) as a play on the seating of all new aircraft, and by the way, this is the stock that got upgraded when UBS downgraded Hexcel. I think both are buys.

Normally I would be suggesting Goodrich (GR), but United Technologies (UTX - Get Report) obviously was thinking ahead with what looks to be a way too generous bid. That said, if the Dreamliner takes off, a dilutive acquisition for 2012 might turn out to be a terrific acquisition in 2013.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,672.60 -141.38 -0.79%
S&P 500 2,051.82 -11.33 -0.55%
NASDAQ 4,757.8790 +7.4820 0.16%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs