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Working Through Robust Numbers

Here's my take on the latest quarterly results from these three portfolio names.
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As I mentioned in an Alert earlier this today, three other companies in the portfolio posted quarterly results this morning aside from Inverness Medical IMA.

First, Black & Decker (BDK) delivered earnings of $1.29 a share, coming in 14 cents ahead of the consensus analyst estimate. On the other hand, revenue fell 5.2% year- over-year to $1.5 billion, which is $30 million short of expectations. The company also cut its full-year earnings guidance by 3% to 4%, to $5.25 to $5.65 a share.

But just as I expected they might, Black & Decker shares are actually trading higher. This marks the second straight quarter the stock has rallied in the face of a poor earnings report, helping to confirm my thesis that the early-cycle name is close to finding a bottom.

Management said that it's aggressively cutting costs to combat lower sales volumes and rising input costs. Given the stock's dividend and buyback support, I continue to believe that Black & Decker remains attractively valued at less than 13 times the low end of the company's full-year earnings guidance.

That's because sales will eventually turn around, and should receive a boost from the upcoming tax rebate and as folks continue to refinance their mortgages. My position in Black & Decker already accounts for 4.4% of the portfolio, and while I don't want to violate my average cost-basis, I maintain that Black & Decker should be bought on any pullback toward the mid-$60s.

ConocoPhillips (COP) also had earnings that came in ahead of expectations before the opening bell. The company earned $2.62 a share, which was a full 20 cents ahead of the consensus analyst estimate. Revenue grew 33% year-over- year to $545.9 billion.

But just the opposite of Black & Decker, Conoco is trading lower on a strong quarter. That's because of the broad selloff we're seeing today in commodity stocks, even though Conoco trades at just 7.5 times expected full-year earnings.

While I don't agree with this move, these commodity pullbacks have lasted about three days in recent history, and we're currently only on day two. With that in mind, outside of my earlier purchase in Yamana Gold (AUY) , I'd wait until Friday before picking away at some of these commodity names like Conoco.

Raytheon (RTN) also knocked the ball out of the park this morning, posting first-quarter earnings of 93 cents a share, which was 9 cents ahead of expectations. New order bookings came in at $6.5 billion, up from $5.2 billion in the previous year, sending the company's backlog up to a record $37.7 billion.

But as we've seen earlier this week with other defense companies, like General Dynamics (GD) and Lockheed Martin (LMT) , that sold off after posting strong quarters, Raytheon is little changed for the session.

That said, at $66.18, the stock remains a core holding in the portfolio. No matter who eventually wins the White House in November, I believe that defense spending will remain strong for the next several years. With that in mind, Raytheon should trade up through $70 over the coming months.

Regards,

Jim Cramer

DISCLOSURE: At the time of publication, Cramer was long Black & Decker, ConocoPhillips, Inverness Medical and Raytheon.

Send email to james.cramer@thestreet.com.