General Cable, Buffalo Wild Wings and Mastercard are all down huge, Cramer said, despite reporting better-than-expected quarters. He blames it all on the bar and hair.
An explanation is in order because these terms aren’t what one might expect.
All three companies beat estimates three straight times. While that might seem like a good thing, it actually raises the bar even higher for all subsequent quarters. Analysts get so used to outperformance that even when the companies deliver strong numbers, it’s still not good enough for Wall Street.
In addition to the high bar, each company had a “hair on the quarter.” That’s Wall Street gibberish for something being wrong with the better-than-expected numbers. It’s like finding a hair in that perfect salad.
Mastercard was flagged by a firm for exposure to domestic slowing. General Cable issued an extremely downbeat outlook. Buffalo Wild Wings has a bad month of same-store sales.
It’s not too late to sell off some of a position in any or all of these three companies. They are all still up big. Any investor that bought in at a higher price, though, should probably cut his losses, even though it’s the stocks that are broken here and not the companies.
“I don’t see them being the next Starbucks or Whole Foods, classic high-growth stocks that ceased being high-growth stocks,” Cramer said. “Nevertheless, the doubt has increased. And that means if you haven’t sold some already, this Sell Block says you must.”
Questions for Cramer?
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