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?

On the other hand, Parker Hannifin(PH Quote) "severely disappointed" in its quarterly earnings report last week. "And what's the stock done? It's roared," he said.

"You want to own PH," he said. "PG simply doesn't work" in this environment. ("Stop Trading!" 4-22-09)

On stocks of companies that have significantly lowered earnings guidance, buy defensive puts. This works for Texas Instruments (TXN), Ingersoll-Rand (IR), Eaton (ETN), International Paper (IP), National Semiconductor (NSM), Sandisk (SNDK), Illinois Tool Works (ITW), Massey Energy (MEE), Parker Hannifin (PH), Estée Lauder (EL), Time Warner (TWX), CSX (CSX) and Norfolk Southern (NSC).

My name is really Parker.

Q: So this is a historic buying opportunity?

A: Right. We are in the process of creating a bottom, most likely in the next 12 to 18 months. As for buying opportunities, they are not confined to small-caps. We've got the S&P at a multiple of about 11. There are some larger-cap industrials like an Eaton [ETN] and Parker Hannifin [PH] selling at six or seven multiples on current earnings. You could haircut earnings next year way beyond your imagination, say 30% to 40%, and you still have a single-digit multiple on the stocks.

11/18/2008

Cramer: How to Trade Eaton:
This is a great company, but proceed with caution, says Jim Cramer.


Click here to watch the video.

Parker-Hannifin (PH), $8 billion.

But it is the finance model, the GE finance model, that this really helps. It is worth pointing it out because, again, anything that takes the Great Depression off the table -- including the ability for finance companies to, well, finance -- is very important. That means Honeywell (HON), Eaton (ETN), Parker-Hannifin (PH), United Tech (UTX) all should be doing better here, as well as Caterpillar (CAT) and Deere (DE), which have an ability to issue.

19%