Tech stock selling intensified overnight as market-based inflation measures hit the highest levels in ten years as Dow and Nasdaq futures are falling Tuesday.
In the last episode of Mad Money, Jim Cramer said younger investors should looking beyond tech to the raw materials, transportation, retail and bank stocks that made it all possible.
TheStreet’s Katherine Ross and Cramer are talking about Honest Co.’s IPO, stocks young investors are buying and how to spot a defenseless stock.
The Honest Company: Buy Or Sell?
In his “Know Your IPO” segment, Cramer opined on this week’s debut of The Honest Co. (HNST) – Get Report, which came public on Wednesday at $16 a share and rose to highs near $23 before giving back some of its gains.
Cramer said when we compared Honest to other companies in its cohort we found it’s just so expensive versus the others but they brought it public. “You’re not going to be stopped by the fact that the market has no appetite for your stuff at all. You cut the price and get the deals done,” said Cramer.
What Are Young Investors Buying
Cramer said Robinhood was the most downloaded app last week. “I think people who are on Robinhood are buying Dogecoin. For a half-hour on Saturday night, Robinhood crashed dogecoin. I think young investors are buying, typically, Ethereum. They’re buying Ethereum very heavily. They are already in a lot of the Nasdaq stocks I’m talking about. They don’t care about a DuPont (DD) – Get Report or an Alcoa (AA) – Get Report,” said Cramer.
Defenseless Stocks
Are there too many defenseless stocks?
“The underwriters just created too many stocks. There’s too many new companies, too many companies that help you with analytics, too many that offer video, too many data collectors and too many real-time analysis, and too many cybersecurity companies. There have been too many new electric vehicle derivatives, too many cannabis plays and way too many new fintech [companies],” Cramer wrote in his Real Money column.
Cramer said, historically, investors do not buy stocks that are price to sales during high inflation. “Defenseless stocks are price to sales instead of price to earnings, its SPACs, the insider selling of SPACs, but mostly my focus is on no dividend, no buyback, no price to earnings. These are the stocks that are for sale,” he said.
None of the stocks mentioned in this article are key holdings in Jim Cramer’s Action Alerts PLUS member club. Want to be alerted before Jim Cramer adds or removes stocks from his portfolio? Learn more now.
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