A caller to Jim Cramer's Mad Money program during the Lightning Round had a simple question for the famed stock picker.
As a long-term growth stock, is weapons manufacturer Raytheon Technology (RTX) -) a buy after a nearly 16% decline in the stock year to date?
DON'T MISS: RTX stock plunges after revealing Pratt & Whitney engine inspection issue
Raytheon has been on Cramer's radar for months despite its struggles on the market, and he said the stock had "unjustified weakness" in June.
"It had a manufacturing problem that has taken the stock down 10 points, I think it's time to buy. I'm taking it out of the penalty box right now," Cramer said.
Now might be a good time to get in on the stock which announced a new $24 million contract from the U.S. Army earlier this week to produce electric generators.
Raytheon Technologies has been rebranded as RTX following its merger with rival United Technologies.
More Jim Cramer:
- Jim Cramer thinks this meme stock is about to go bust
- Jim Cramer reveals why one popular investing method is a ‘sucker’s game’
- Jim Cramer says Cathie Wood doesn’t understand one basic investing rule
Cramer used his "unjustified weakness" line again two months ago.
“I think you’re getting another chance to buy RTX into unjustified weakness here,” Cramer said. “Because, if anything, I feel much more confident about their long-term prospects in both aerospace and defense — two businesses where they seem set for many, many years of gigantic orders.”
But the company has been in trouble since it said that a "significant" number of its Pratt & Whitney engines would need to be removed from Airbus A320neo airplanes for urgent inspections.
The so-called GTF engines, which are used by Airbus clients such as Delta Air Lines (DAL) -), were said to have been affected by a "rare condition in powder metal used to manufacture certain parts", according to RTX, and will require an "accelerated fleet inspection" over the coming year.
RTX acquired Pratt & Whitney through the $120 billion merger between Raytheon and United Technologies in 2020. Raytheon, which makes the Tomahawk and Patriot missile systems for the US military, took on 43% of the combined group.
Get investment guidance from trusted portfolio managers without the management fees. Sign up for Action Alerts PLUS now.
