CNBC's Jim Cramer said Monday that investors should look to buy the stocks of companies that excel in a prolonged stay-at-home economy, suggesting there are worrying coronavirus signs in the U.S. and abroad that mean "the lockdown trade" has returned.
Specifically, the "Mad Money" host referenced the rising Covid-19 cases in European nations, with the economic restrictions being reimposed in the U.K. possibly serving as a harbinger for what may come in the U.S.
But this time around, Cramer said that investors need to be "more selective." The rotation into the stay-at-home stocks that transpired during Monday's session, which saw the Dow Jones Industrial Average decline more than 500 points, is likely to persist beyond just one day, he added.
"We've been through this twice now and the pattern is clear: the lockdown stocks keep roaring until we get a sustained period where Covid cases go down and businesses can reopen," Cramer said.
Campbell Soup is one of the top names to look at, Cramer said. Shares of the packaged foods maker rose about 1.4% Monday. Since August 24, it has been down over 12%.
"We just had CEO Mark Clouse, on the show. I thought he told a good story about a great shift among millennials, who are embracing his canned soups and his snacks — think Goldfish — like never before," Cramer said.
On the other end of the food category, Cramer said it would prudent to sell stocks like Olive Garden-parent Darden and instead shift into companies such as Wingstop and Domino's, which have "terrific delivery platforms." The pair of stocks gained 3.8% and 1.8%, respectively, on Monday.
Cramer said he believes the coronavirus developments, both internationally in some states across the U.S., "means that we're not going back to work any time soon." For that reason, he said cybersecurity companies such as Zscaler, Okta, CrowdStrike and Palo Alto Networks are smart places to look.
"They're essential to the remote work trade," said Cramer, while also referencing "tried and true" Zoom Video, which experienced a pullback early in September but has found its footing and restarted its move to the upside.
DocuSign benefits from not only the persistence of remote work, but the company's digital signature software also is essential in the strong home market, Cramer said. The stock was up more than 5% Monday.
Despite the opportunities presented by the aforementioned stocks, the host said he cannot advise investors to buy his every component in the Cramer Covid-19 Index. That's because it contains some of the pharmaceutical companies working on vaccine and therapeutic development, he said.
"The drugs stocks are, once again, under assault. It's the run-up to an election and they're mighty hard to own because both parties love to bash big pharma, even as I think it's all rhetoric," said Cramer.
Uncertainty around the election, more broadly, is now casting a shadow over Wall Street. But Cramer said the coronavirus pandemic remains a huge influence on the direction of the market and therefore, how investors should be positioned heading into the fall.
"Look at it like this: as long as there's a big line to get into elevators at offices, you can keep expecting cases will keep climbing, which means we're right back to where we started from," he said