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Cramer: Quick conclusion that led investors astray

Wednesday, 22 Jan 2014 | 6:15 PM ET
Xilinx CEO: Market share growing rapidly
Wednesday, 22 Jan 2014 | 6:15 PM ET
Xilinx president and CEO Moshe Gavrielov tells Mad Money host Jim Cramer weakness in margin was a major "blip" and doesn't expect to go down any further.

(Click here for video linked to a searchable transcript of this Mad Money segment)

Jim Cramer always says never, ever trade off the headlines. This is why.

They don't always tell the whole story. "It's not until you listen to the conference call that you can make an investment decision. If you jump the gun, I guarantee, you'll be sorry," Cramer said.

Case in point, if you sold Xilinx right after the company released earnings, you would have quickly rued the decision.

Lisa-Blue | E+ | Getty Images

Of course, at the time the knee jerk reaction to sell would have seemed to make all the sense in the world.

Xilinx forecast current-quarter revenue largely below analysts' estimates, hurt by weak sales to telecom, aerospace and defense customers, sending its shares down 4 percent in extended trading.

Immediately shares took a nose dive in the after market. "Shares fell from $47 and change down to $42," Cramer noted.

However, after listening to the conference call and hearing from management, you would have quickly come to realize that selling was exactly the wrong move.

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"Management explained sales of new generation, smaller, 28 nanometer chips were up 79% year over year," Cramer explained. In this case, that's the metric that matters. "And it was just a huge number."

"Plus, beyond the strength in new chips, Xilinx also saw better than expected sales related to China's next-generation 4G LTE wireless network build-out," Cramer added.

By the end of trade on Wednesday shares of Xilinx had recaptured those losses and then some.

Sellers were left crying in their coffee.

The lesson here is that, "Often times key metrics matter more than headlines," Cramer reminded. That's particularly true in tech. "And this is, most definitely, one of those cases."

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

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