Jim Cramer on ESCO Technologies: “I Find This One Intriguing”

ESCO Technologies Inc. (NYSE:ESE) is one of the 15 stocks that Jim Cramer recently talked about. Cramer discussed ESCO Technologies Inc. (NYSE:ESE) and said that it looks like a “well-rounded business,” as he commented:

“When you look under the hood, there’s actually a lot of interesting stuff here, which is why the stock’s up more than 70% over the last 12 months. See, over 40% of ESCO’s business last year came from their aerospace defense division… 27% of their sales come from US government contracts… Another 35% of ESCO’s revenues come from their utility business… ESCO’s RF Test & Measurement segment, that’s 20% of revenue…

Honestly, you know what, this sounds like a well-rounded business, and when the company reported back in May, that was on full display. ESCO turned in slightly better than expected sales, up 7%, with truly better than expected earnings, up 24%. Management was confident enough in the momentum they’re seeing to raise their full-year earnings forecast. That was good enough to send the stock rallying more than 6% the next day…

… Overall, I find this one intriguing. Sure, with ESCO trading at roughly 26 times next year’s earnings estimate, it’s not the cheapest stock in the market, but this is a company that’s looking at nearly 15% earnings growth next year, and 40% of the business is related to aerospace and defense, which is I think [in] great shape here.

Even though the stock doesn’t garner a lot of Wall Street coverage, that might just be another positive. Not a bad idea to start a position before the analysts start getting enthusiastic about it. You can tell I like this company. It may seem like a boring business to some, but not everything needs to be a play on crypto or artificial intelligence, or flying cars.”

An industrial tech facility with robotic arms for precision machining components.

ESCO Technologies Inc. (NYSE:ESE) develops specialized filtration, fluid control, propulsion systems, and diagnostic testing products across aerospace, defense, utility, and RF measurement markets.

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