Cramer's Stocks to Stay Away From
Not every stock pullback is a buying opportunity, Jim Cramer said Friday on CNBC's "Mad Money." At the peak of earnings season, one of the biggest questions on the table is whether or not to go all in when a stock sees a sharp sell-off.
While Cramer said there's no definitive answer, he broke it down on a case-by-case basis — starting with the buyable declines.
Starbucks and Celgene are among the stocks Cramer currently deems a buy. Despite having reported quarterly numbers that were just in-line with analyst estimates and in spite of lackluster European sales, he thinks Starbucks is a classic growth stock that will bounce back from its decline. He also called Howard Schultz "one of the best CEOs in America" and said the coffee giant was still worth the risk. "But I'm never going to say no to Dunkin," he added.
As for Celgene, Cramer touted the many upcoming approvals the pharma company has in the pipeline and said the recent weakness caused by its big drug, Revlimid, was already being priced into the stock. He said the firm will most likely be able to stage a sturdy comeback once more.
(RELATED: Cramer’s Ultimate Growth Stocks for 2012)
But the "Mad Money" host said to stay away from Procter & Gamble, Deckers and Ford. He said P&G has lost its way and needs to start making drastic price cuts. Deckers gives us UGG brand footwear, which "has run out of steam," he said. And Ford is weighed down by weakness in both Europe and Latin America.
"Wait until one of these two areas clears up," Cramer said. "And CEO Alan Mulally can't predict an end to the weakness in Europe." In other words, stay away.
And how about those disk drive companies? "They're cheap as dirt and are down huge," he said. "Don't even think about it."
He went on to say the brief boost we saw in that sector was thanks to Thai flooding and that once they reach equilibrium, you can't own these commodities.
"Earnings will plummet and stocks will stay dangerous for some time," he said.
—Read on for Cramer: The Best Run U.S. Companies
Call Cramer: 1-800-743-CNBC
Questions for Cramer? email@example.com
Questions, comments, suggestions for the Mad Money website? firstname.lastname@example.org