After the sell-off triggered by omicron last week, many stocks are trading well below their 52-week highs, especially in the tech area.
But making the obvious and buying the cut on your favorite tech companies could mean missing out on âthe easier money,â says Jim Cramer.
âI prefer to find companies that have performed well during earnings season and that have been unfairly trampled over the past few weeks because they weren’t part of the Nasdaq stampede,â said the crazy money the host said on his show last week.
“That way you can fall back on the fundamentals – these still matter – and buy more if they end up going down.”
Here are Cramer’s four stock picks for this market rotation, each of which could be a lucrative buy, especially if you invest for free.
Morgan Stanley (United States)
Like its financial sector counterparts, Morgan Stanley had a strong bull run from last November to August.
More recently, however, stocks have not been able to maintain this bullish momentum. In fact, the stock is down about 10% from its August high.
âThis company did everything right during that time, but because of the insane financial turnover, the stock got squashed,â Cramer said.
He points out that the investment banking giant was trading at just 12 times earnings, a very cheap valuation in the current market, especially compared to high-flying Nasdaq tickers.
Cramer says Centene has been one of his favorite health insurers “for ages.”
Centene stock is up 17.6% in 2021, lagging behind the S&P 500’s 28.5% gain since the start of the year.
Still, Cramer argues that, because Centene primarily manages government-run health plans, it would “benefit tremendously” from any Medicare or Medicaid expansion that the Biden administration supports.
In the third quarter, the company’s revenue increased 11% year-on-year to $ 32.4 billion. Management expects annual sales to be between $ 125.2 billion and $ 126.4 billion.
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Johnson & Johnson (JNJ)
Johnson & Johnson is down about 12% from its August high, and its recently announced plan to split into two companies has done little to help the share price.
Still, Cramer likes the healthcare giant for its dividend yield, which currently stands at 2.7%.
It also highlights the potential of JNJ’s pharmaceutical business after the consumer products division split.
âThe pure pharmaceutical company that remains will be the fastest growing large pharmaceutical company in the universe. It should become an instant market darling, âhe says.
United Parcel Service (UPS)
E-commerce was already one of the fastest growing market segments, and the pandemic-induced stay-at-home environment only made online shopping more popular.
Cramer points out that freight companies like UPS are what make e-commerce possible in the first place.
UPS posted strong earnings last month. In the third quarter, consolidated revenue increased 9.2% year-on-year to $ 23.2 billion. Meanwhile, adjusted earnings per share rose 18.9% to $ 2.71.
Management has planned a good term vacation, and that makes Cramer dizzy.
âWith the rails roaring, I think UPS will now catch fire, a fire that burns for days, if not weeks, over the Christmas holidays,â he says.
Yes, UPS is currently trading at almost $ 200 per share. But you can still get a portion of the business by using a popular app that lets you buy fractional shares with as much money as you’re willing to spend.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.