“Its Free Cash Flow is Going the Wrong Way”

Stanley Black & Decker, Inc. (NYSE:SWK) is one of the stocks Jim Cramer shared insights on. Cramer said that buying the stock now would be “reaching for yield,” as he remarked:

“… Look, it’s not just Dow. We were attracted to two stocks from our Charitable Trust because of their high yields: Best Buy and Stanley Black & Decker… Stanley would benefit from a potential turn in housing because it seemed natural that once the Fed got inflation under control, it would start cutting rates. Both stocks initially soared same thesis. We sold… Stanley at a small loss, thankfully avoiding a much larger downturn later on… Now, when Stanley last came on the show, they told us they don’t expect to turn until 2027, which was disconcerting because it immediately made me feel the dividend could be in jeopardy between now and then, especially because the company has so much exposure to Chinese manufacturing. Right now, Stanley has plenty of coverage, but its free cash flow is going the wrong way, and I think you’d be reaching for yield if you bought this stock here…”

Stanley Black & Decker (NYSE:SWK) manufactures hand and power tools, outdoor equipment, fasteners, and engineered industrial products for both consumer and professional use. The company’s products are used in spaces such as construction, automotive, aerospace, and manufacturing.

While we acknowledge the potential of SWK as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.