Was Jim Cramer Right About These 12 Stocks?

7. Stanley Black & Decker Inc. (NYSE:SWK)

Number of Hedge Fund Investors: 33

While talking about the “great broadening” once again, Jim Cramer appeared very bullish on Stanley Black & Decker (NYSE:SWK), seeing it as a prime beneficiary of future interest rate cuts. He said:

“Investors are dreaming. I like the dream—it’s called leverage.”

Cramer pointed out that SWK is deeply tied to the housing market, meaning lower interest rates would boost home sales, remodeling, and demand for tools.

“Stanley Black & Decker is levered to housing turnover, so it’s levered to lower rates. When the Fed starts cutting, you’ll see more existing home sales and more remodelling.”

This, he believed, was why big institutions were shifting money away from high-growth tech stocks and into cyclicals like SWK, saying:

“Wall Street, at certain junctures, falls out of love with great growth stocks and abandons them for cyclical stocks that will do much better in an accelerating economy.”

He later revealed that his charitable trust had a sizable position in SWK, believing that they were positioned for a major upside once rate cuts materialized.

However, it hasn’t been going well for the stock, having dropped by 18% since the show aired.

Cramer has also talked about SWK one more time after the rate cuts were announced, saying:

“We wanted to invest in a company that tends to outperform when mortgage rates go lower and people fix up their homes. After years of lagging the market, Stanley Black & Decker has come back with a vengeance, up 37.9% in the third quarter. It was rallying in anticipation of the rate cuts.”