Mad Money

Cramer: These stocks are too cheap

What falling prices mean for investors

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

The most treacherous part of the year is about to begin, says Jim Cramer, "Earnings season."

It's a time when headlines can move stocks higher or lower only to have those gains or losses canceled out hours later when companies hold their conference calls.

And it's also a time when Cramer looks for those knee-jerk reactions from Wall Street to generate sudden discounts. If you identify a solid company, with a strong balance sheet, reliable management and other bullish fundamentals, Cramer suggests buying shares on any unexpected pullback.

However, if you don't want to wait for earnings season to generate an opportunity in which you can buy the stock of a good company at a discount, Cramer thinks there are at least two companies that are currently cheaper than they should be.

Adam Jeffery | CNBC


"Consider PVH," said Cramer, "It's run by Manny Chirico, one of my Bankable 21 CEOs. It had been derailed by the purchase of Warnaco, but just a week ago PVH not only delivered a better than expected quarter but laid out its multi-year vision. Even though the stock's had a quick seven-point run from the bottom, we are in a consolidation mode for this market, and I think that the opportunity is alive and well."

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Cramer also suggests looking at Nike. "The last quarter could only be described as picture perfect and the stock rallied from $79 to $82 in the aftermarket. But Nike shaded down expectations during the conference call, and that shaved nine points from that pinnacle in the after hours. Nine points! Talk about extreme! It's coming back but not so fast that you've missed the opportunity."

Call Cramer: 1-800-743-CNBC

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