In this article, we will look at Jim Cramer’s recent stock calls as he urged investors to stand by the defense sector. The host of Mad Money spoke on Friday about the state of the defense sector in light of the Iran conflict, and said that he does not think investors should step away from these stocks.
Even though there may be an extremely tenuous ceasefire, you should absolutely not be giving up on the defense sector. No, please don’t give up on these stocks. Whether or not the ceasefire holds, I think this group remains a winner. Why? Because between the supplies that we’ve been giving Ukraine for over four years now, the supplies that we’ve been giving to Israel to defend itself against stepped-up attacks in recent years, and now the supplies that we’ve used ourselves, we’re going to have to spend hundreds of billions, literally, if not trillions of dollars, building back our weapons stockpiles.
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Cramer explained that the United States is already dealing with limited supply across a wide range of military equipment, from fighter jets to missile systems. He said it is not something that can be fixed quickly, and called it a multi-year effort that will take significant time to play out. He added that the demand tied to replenishing munitions alone will translate into meaningful and sustained business for defense contractors well into the future. He also said that the risks involved in not addressing these shortages are simply too high to ignore.
Here’s the bottom line: Even though the defense contractors haven’t really been able to rally since the war with Iran got going, that’s mainly because they were already flying in the two months leading up to the conflict. At this point, I think the whole group is poised for a major multi-year run. You should be thinking about these purely because we need to replenish most of our missile supplies, but also a lot of other hardware, and that’s especially beneficial, Lockheed Martin, RTX, and L3Harris. And for what it’s worth, Trump himself loves Palantir here, even though it’s gotten much harder to own thanks to those AI displacement fears.
Our Methodology
For this article, we compiled a list of 19 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on April 10. We listed the stocks in the order that Cramer mentioned them.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
Why Jim Cramer Stands by Defense Sector and 19 Stock Calls
19. NIKE, Inc. (NYSE:NKE)
NIKE, Inc. (NYSE:NKE) is among Jim Cramer’s recent stock calls as he urged investors to stand by the defense sector. Cramer shared his pessimistic view on the company, as he said:
I’d like to think that if Mark (the late Mark Haines, CNBC anchor) were alive, he’d look favorably on what we’re doing with the CNBC Investing Club. This morning in our morning meeting… we talked about how wrong we’ve been on the stock of Nike. There was a cogent downgrade this morning from Piper, which talked about a lack of innovation, and perhaps that was because the new CEO, Elliott Hill, an old hand who left Nike after 30 years, is basically reassembling the band at a time when what matters is newness. Now, Jeff Marks, my director of portfolio analysis, asked me about my stand on Nike, a stock I pressed to own because I thought it was incredibly cheap and Hill could bring back the glory days. I said I was going to give him until October, when it would be two years. He inherited a company with many more problems than anyone realized, and the turn is difficult to pull off. But I haven’t been early on Nike; I’ve been wrong. I don’t deserve a free pass either.
NIKE, Inc. (NYSE:NKE) is an athletic and casual footwear, apparel, equipment, and accessories company that sells its products under brands, including Nike, Jordan, and Converse.
18. McCormick & Company, Incorporated (NYSE:MKC)
McCormick & Company, Incorporated (NYSE:MKC) is among Jim Cramer’s recent stock calls as he urged investors to stand by the defense sector. Cramer discussed the company’s acquisition of food brands from Unilever, as he commented:
I want to contrast that with how I handled myself the previous day with Brendan Foley, the CEO of McCormick, the spice company. Brendan’s just done a gigantic deal with Unilever to buy Hellmann’s mayonnaise from them, among other brands. Wall Street clearly thought he paid too much because the stock cratered. Now, I disagreed. I thought it looked like a good deal, but looking back, I think I gave Brendan a free pass because I didn’t press him on the cost, which was pretty high.
Some would say outrageously high during an era where the packaged food space is under siege. I could hear Mark (the late Mark Haines, CNBC anchor) in my brain saying, how could you run those brands better than Unilever? Why did you give away so much of the company? I mean, these are the questions he would’ve asked with immediate follow-up if the questions weren’t satisfactory. He wasn’t there to make friends. He was there to see if the CEO knew what he was doing.
McCormick & Company, Incorporated (NYSE:MKC) produces and sells spices, seasonings, condiments, and flavor products for consumers and food manufacturers.
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