This diversified consumer cyclical recently announced that its retiring a large number of equity units that were issued in March -- a deal that nets the company three-quarters of a billion dollars in fresh cash.

Do you mind if I crow that a big industrial like Illinois Tool Works (ITW - commentary - Trade Now), which has repeatedly cut its outlook, raises it today, or that I expect similar reforecasts from Action Alerts PLUS charitable trust names Johnson Controls (JCI), Cooper Industries (CBE), Emerson (EMR) and Honeywell (HON), and perhaps from Parker Hannifen (PH) and Eaton (ETN) on the heels of the ITW news?

A bet on auto industry

Recovery

started buying in addition to my 401k

Johnson Controls is the leader in a very bad auto and machine market. They are the stock when the dust settles to be in!

"If I had to own something remotely related to autos, which I'd rather not, I'd probably own this one. It's the best house in a bad neighborhood." "Cramer's 'Mad Money Lightning Round,'" 6-15-09

"People want Sears (SHLD) because they want to play companies that will benefit coming out of a recession and are still solvent. They want Johnson Controls (JCI) because they need some play on autos because the auto market is coming back." ("Saftey Last," 6-1-09)
...
Cramer offered another trade on the back of General Motors' (GM Quote) bankruptcy filing: Johnson Controls (JCI Quote), which he said is a "very well-run company."

Cramer said that Johnson Controls is a play on a turn in the auto industry. "I've been waiting for the auto industry to slow down," he said, to a point where people fill the risk is out. (Cramer's "Stop Trading!" 6-1-09)

Outperform - Price 17.49 on April 21
by Baird Securities

There could be some upside to our fiscal 2009 earnings estimate of 5 cents. The March quarter was cash-flow-positive for the first time in six months [...with more than] $2 billion in excess liquidity intramonth. Outstanding commercial paper at quarter's-end was about $400 million, with no borrowings on [revolving credit]. Return to profitability [is expected] in the June quarter. The automotive business is expected to have operating losses of less than $50 million, with break-even reached in the September quarter. Market cap: $9.6 billion.

On the stocks of companies whose managers have retracted earnings guidance, buy straddles. This entails buying a put and a call that have the same strike price and expiration date. If the stock price rises or falls, the straddle could increase in value. This is a good strategy for Molex (MOLX), Johnson Controls (JCI), Applied Materials (AMAT), Abercrombie & Fitch (ANF), Leggett & Platt (LEG), Fortune Brands (FO), Coventry Healthcare (CVH), BJ Services (BJS) and Union Pacific (UNP).

This is similar to GROW. I still like the company, it just isn't getting any love. Losing 50% really isn't help my love affair with this stock; but unlike Grow, I feel this one can bounce back. Unfortunatly, the Street is ignoring JCI's other function and focusing on just the car element.

Gone down in spades by never sold

Losing big time

above historic highs