Instead of panicking, “Mad Money” host Jim Cramer thinks investors can actually profit from selloffs. After all, a down day provides investors the opportunity to buy high-quality growth stocks at discount.
Investors should look for companies with “powerful long-term, secular growth stories; the kind of rapid yet consistent growth that’s coveted in an environment where economies around the globe seem to be slowing,” Cramer explained. These stocks have growth stories so robust they bounce back harder and faster than the rest of the market so when the market tumbles, investors can confidently buy into weakness. In other words, Cramer would only buy growth stocks on a pullback. “The market will always give you a price break if you’re patient,” he said.
Cramer compiled a list of his Ultimate Growth Stocks for 2012. To identify the “great growth stocks of the era,” he developed a 10-point growth rubric. The criterion include whether the company has a clear growth plan, sizable market for its products and opportunity for international expansion. The company must also be competitive, return capital to shareholders and have a strong management team. He also wants to see a strong balance sheet, as well as secular growth and margin growth.
Each stock had to fit the criteria to get on the list. Read ahead to see what stocks made his list, as well as three web extras.
By Drew Sandholm
Published 19 April 2012
When this slideshow was published, Cramer’s charitable trust owned Apple and TJX.