A sector with tons of secret opportunity right now
Jim Cramer is seeing a new trend that he has never spotted before. Somehow entire groups of stocks are being consistently undervalued in anticipation of good news or earnings. What the heck is going on?
In fact, Cramer thinks that the situation with the dollar growing in strength against the has just been delaying the market from going even higher. It was always going to go higher, and the currency wars just stifled it temporarily. Buckle up!
"This failure to analyze positive moves ahead of the action has become endemic, and it's astonishing to me, given that for almost my entire life, the market has accurately discounted good news beforehand, not afterwards, as it has been doing lately," the "Mad Money" host said.
Cramer has seen many confused money managers who are used to selling on news, because they assume that a stock has hit its high when it announces good news. Instead, these stocks defy common sense and continue to go higher afterward.
The most obvious sector where this is occurring is biotech, where the market doesn't seem to anticipate good news, and then the stock only reacts well after the news is announced.
A few stocks that Cramer sees this phenomenon correlating with stocks like Regeneron, BioMarin and Pharmacyclics. Regeneron announced fantastic news on its anti-cholesterol data this past weekend. Typically the stock should run up in anticipation of the news and then sell off. Instead, the positive news came out, and the stock ran even higher!
"I guess people just didn't believe. Now Regeneron is breaking out, and the analyst community will be raising their price targets and estimates on this news, and the stock can recharge and go still higher," Cramer said.
Then there was BioMarin, and people just keep coming out of the woodwork to buy this stock. Cramer has been pushing it for years, yet somehow people haven't heard of it and keep buying.
"Where are they, these buyers? Why do they only buy the stock on the fly? Next thing you know, BioMarin will get a takeover, even as it has run and run, and here's actually been big insider selling!"
Or how about Edwards Lifesciences, which shot up $13 on Monday. This stock was up due to its new heart valve replacement system. Now the stock goes up? Now? Cramer has been raving about it for years! Still, even though the market just clued in to this late, he thinks it is not done, yet.
He has also seen this trend of opportunity outside of biotechs, in stocks like Harman International and Tesla. Elon Musk tweeted out over the weekend that he will have a major software announcement on Thursday that will reduce range anxiety. Cramer anticipates that this stock will run up in anticipation of the announcement, and then embrace everything he has to say.
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"In short, the stock market's not doing its job. It's not taking into account breakthroughs, and it's saying over and over again 'it's not too late,'" Cramer said.
The "Mad Money" host thinks that skepticism could explain this strange phenomenon. It's just too thick right now. So, now he wants you to play that skepticism to your advantage, and snap up these opportunities while you still can.
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