In this article, we will look at the stocks Jim Cramer discussed while explaining how investors can navigate the current market rotation. The host of CNBC’s Mad Money said Monday that investors should take advantage of steep pullbacks instead of running after brief rallies that often fade quickly.
Sometimes we buy hardware stocks and the goods that go into or help build data centers, like semiconductors and semiconductor equipment, while we sell all kinds of software stocks. Sometimes, we sell hardware stocks and buy those same software stocks that we threw away. We do more of the former than the latter… When we get a rotation and the losing software stocks power higher like they did today, they do so with a level of ferocity that makes you feel like the decline’s got to be over… Yet the rotations never seem to last… These stocks keep being whipped around thanks to various ETFs that treat stocks like playthings.
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Discussing a way for investors to make money during these market swings, Cramer said investors should pull up the list of the 10 biggest decliners in the S&P 500 and look closely at those companies. If any of those businesses still have healthy balance sheets and reliable operations despite the selloff, he said the lower prices can create an opportunity to step in and buy. He said that if the fundamentals remain intact and the stock is simply “on sale,” then investors should “buy, buy, buy.”
Bottom line: I just showed you how to use the rotation to buy something, not aggressively, but gingerly on the way down, as we wait for all the variables I talk about, especially the endless back and forth about the war and about the Strait of Hormuz and nuclear materials to play out. We got to find out whether President Trump’s inability to bend Iran to his will is ever going to end.
Our Methodology
For this article, we compiled a list of 17 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on May 18. We listed the stocks in the order that Cramer mentioned them.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
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17. SOLV Energy, Inc. (NASDAQ:MWH)
SOLV Energy, Inc. (NASDAQ:MWH) was among the stocks Jim Cramer discussed while explaining how investors can navigate the current market rotation. Answering a caller’s query about the stock toward the end of the lightning round, Cramer said:
Yes, that is again, boy, we’ve got some really good ones tonight. That’s a great niche company, and I salute you for bringing it to our attention.
SOLV Energy, Inc. (NASDAQ:MWH) constructs and maintains large-scale solar and battery storage systems, managing the process from initial engineering through final setup. The company also handles ongoing upkeep and grid infrastructure support for utilities, project developers, and independent power producers.
SOLV Energy, Inc. (NASDAQ:MWH) reported its Q1 earnings on May 12. The company posted a GAAP EPS of -$0.20 and revenue of $677 million. Its gross profit was up over 100% year over year to $119 million. The company’s net loss was $27 million, mainly due to a one-time, non-cash expense of $521 million tied to legacy equity award modifications from its recent IPO reorganization.
16. STMicroelectronics N.V. (NYSE:STM)
STMicroelectronics N.V. (NYSE:STM) was among the stocks Jim Cramer discussed while explaining how investors can navigate the current market rotation. A caller sought Cramer’s opinion on the stock, and here’s what he had to say in response:
We’re late, we’re late, we’re late. 51 times earnings does not make it for me, even if it’s a good company.
STMicroelectronics N.V. (NYSE:STM) is a semiconductor manufacturer that designs and produces electronic components, including sensors, power management solutions, and microcontrollers. Cramer was bullish on the stock when a caller inquired about it during the January 16 episode. He commented:
It’s cheap. It’s good. Now, people say it’s cheap. What do you mean?… like 40 times earnings versus the others with growth? It’s actually okay. I would be a buyer of STMicro.
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