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Own stocks that are cheap on a price/earnings basis


On Friday, CNBC’s Jim Cramer outlined next week’s earnings list and advised investors to stick to companies that are profitable but affordable to investors.

“In this environment, you need to own companies that make things and do things profitably, but also add stocks that stay cheap on a price-to-earnings basis,” said the host of “Mad Money”.

Even as the Fed tries to rein in rising prices, “we’ve already seen signs that inflation is peaking in many areas. Unfortunately, the same is true for the rest of the economy,” he said. he added later.

Cramer said on Monday he would keep an eye on Russia’s invasion of Ukraine and its effects on commodity prices. He also said he would watch 30-year Treasury bonds.

“The 30s, not the 20s[-year], which is where all the action will take place once the Fed starts selling its bond portfolio. You should know that this liquidation within 30 years means much higher rates are on the way,” Cramer said. “Prepare for them. Higher long rates will likely hurt the Nasdaq as we saw today, not the Dow Jones, which may hold up very well because it’s full of tangible companies that fit my criteria.”

The Dow Jones Industrial Average rose 0.4% on Friday. The S&P 500 fell 0.27% while the Nasdaq Composite fell 1.34%. All three declined for the week.

Also on Cramer’s radar, a “scorching reading” is expected in the March consumer price index released next Tuesday.

“It will be inexorable and wicked until we see the peak of everything. Whatever the so-called consensus is, it is almost always too low right now, and so it will goof bondholders and put the pressure on the stock market that day,” he said.

Cramer also previewed next week’s earnings list and gave his thoughts on each reporting company. All earnings and income estimates are courtesy of FactSet.

Tuesday: Albertsons, CarMax

Albertson

  • Publication of results for the fourth quarter of 2021 before the bell; conference call at 8:30 a.m. ET
  • Projected EPS: 64 cents
  • Projected revenue: $16.76 billion

Cramer said he expects strong results from Albertsons and is on the lookout for an announcement whether he plans to go private or reveal a big buyout or dividend.

CarMax

  • Fourth quarter 2022 results before the bell; conference call at 9 a.m. ET
  • Projected EPS: $1.27
  • Projected revenue: $7.5 billion

“Any sign that this endless series of price hikes is over or that demand has been destroyed … will reinforce my thesis that all used car companies must be sold,” Cramer said.

Wednesday: JPMorgan Chase, Bed Bath & Beyond, BlackRock, Delta Air Lines

JPMorgan Chase

  • First Quarter 2022 Earnings Release at 6:45 a.m. ET; conference call at 8:30 a.m. ET
  • Projected EPS: $2.72
  • Projected revenue: $30.57 billion

“Every time the Fed raises rates, these guys instantly become more risk-free,” Cramer said.

Bed bath and beyond

  • Publication of results for the fourth quarter of 2021; conference call at 8:15 a.m. ET
  • Projected EPS: 4 cents
  • Projected revenue: $2.08 billion

“The question here is simple: will big new shareholder Ryan Cohen, of Chewy and GameStop fame, join the board, and will the Buy Buy Baby business be sold to private equity? ?I think everything is on the table, and the stock is going up significantly,” Cramer said.

black rock

  • Publication of the results for the first quarter of 2022 before the bell; conference call at 8:30 a.m. ET
  • Projected EPS: $8.95
  • Projected revenue: $4.73 billion

Cramer said he wanted to know how “individuals could vote for their index fund shares.”

Delta Airlines

  • Publication of the results for the first quarter of 2022 before the bell; conference call at 10 a.m. ET
  • Projected loss: loss of $1.30 per share
  • Projected revenue: $8.74 billion

Cramer said he was in favor of travel stocks, but thinks airlines are currently a tough sell “given how much money they can lose in a Fed-mandated recession.”

Thursday: Goldman Sachs

Goldman Sachs

  • First Quarter 2022 Earnings Release at 7:30 a.m. ET; conference call at 9:30 a.m. ET
  • Projected EPS: $8.95
  • Projected revenue: $11.98 billion

“I’ve never seen Goldman Sachs shares so cheap, ever. … I think you have a pretty good chance of catching a bounce here, if not an investment, because at this point it shouldn’t be surprising Goldman’s first quarter was lousy,” Cramer said.

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