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Jim Cramer says he likes these 3 industrial stocks heading into 2023


CNBC’s Jim Cramer on Friday identified three industrial stocks that he believes are price owning next 12 months, saying he expects them to outperform the sector’s top performers in 2022.

One of the best-performing industrial stocks within the S&P 500 thus far this 12 months have been Northrop Grumman, Lockheed Martin and Deere — up 36.9%, 35.6% and 25.7%, respectively. Looking ahead, though, Cramer said he’d prefer to own the likes of Caterpillar, Illinois Tool Works and railroad operator CSX.

Shares of Caterpillar, which reported strong earnings two months ago, have climbed 12.6% 12 months to this point. Cramer said he favors Caterpillar over fellow machinery maker Deere.

“CAT has way more exposure to infrastructure, and I feel they have a lift from the oil and gas industry coming,” Cramer said. “Definitely price owning here at 17 times earnings,” he added.

Illinois Tool Works shares are down greater than 12% in 2022 because fears of an economic slowdown have trumped the corporate’s actual results, Cramer contended. “I prefer it here, in fact more [so] on a pullback,” he said. “But I provide you with my blessing to purchase ITW.”

Transports resembling CSX — down nearly 16% 12 months to this point — are “totally hated” on Wall Street, Cramer acknowledged. Nevertheless, he said he believes CSX is attractive for investors with prolonged time horizons.

“For me, it is a long-term story. I see our East Coast ports getting more business as shipping firms adjust to the incontrovertible fact that our West Coast ports are dysfunctional. Within the meantime, CSX is just minting money with coal,” he said. “I feel it’s price buying going into 2023.”

Jim Cramer discusses the best-performing industrial stocks in 2022 and potential 2023 winners

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