In this market, investors should opt for individual stocks instead of exchange-traded funds, which often lump together shares of companies with conflicting trajectories, CNBC’s Jim Cramer said Tuesday after a turbulent trading session.
Using the technology sector as an example, the “Mad Money” host outlined the crosscurrents making the group particularly “complicated.”
Apple’s stock has been dragging a lot of tech stocks lower on iPhone sales worries, and shares of AMD and Nvidia have plummeted on confusion over demand for some of their semiconductor products.
“I can’t in good conscience tell you to ‘buy tech’ here, but I can tell you to buy some specific parts of tech,” Cramer said. “The data center, the cloud, PC, security, autonomous driving — they are all very strong. This is why you pick individual stocks rather than wasting your time with sector-based ETFs, because there are plenty of winners out there.”
Between the mixed messages on U.S.-China trade and concerns about an economic slowdown, day-to-day stock-picking is becoming very challenging for the average investor, Cramer acknowledged on Tuesday.
“We’ve got to call a spade a spade. This market isn’t just volatile, it’s treacherous,” he said after yet another wild trading session on Wall Street. “I don’t want the treachery, which is not going to go away, to get to you. Use it to your advantage.”
The best way for investors to take advantage of the swings is to ignore them altogether, Cramer said. Instead, he suggested focusing on long-term themes “that hold up through this madness” because they aren’t tied to China or the welfare of the broader economy.
Click here for his recommendations.
Tobacco giant Altria Group’s investment in cannabis company Cronos Group may have been a smart move for the cigarette maker, but Canopy Growth Corp. remains the best investment in the cannabis space, says Cramer.
“Even with Altria investing in Cronos, I believe that Canopy Growth remains the best way to play the Canadian cannabis market,” Cramer said Tuesday.
Altria announced its $1.8 billion investment in Cronos on Friday. The companies cast the deal as mutually beneficial, with Altria getting an edge in Canada’s newly legal cannabis market and Cronos being able to expand more quickly and get ahead of U.S. regulatory hurdles.
But even though some Wall Street analysts embraced the deal, with one calling it a “unique entry into cannabis” for Altria, Cramer said Canopy Growth’s scale gives it a significant advantage over Cronos. Canopy has the added advantage of a multi-billion-dollar infusion from U.S. alcohol producer Constellation Brands, he noted.
Click here for his full analysis.
The stock market’s recent swings might not be as bad as investors think, especially when stacked against their historical performance, technical expert Rob Moreno told Cramer on Tuesday.
After consulting the charts of the major averages, Moreno, the publisher of RightViewTrading.com and Cramer’s colleague at RealMoney.com, concluded that stocks are in a consolidation phase, trying to digest the gains from a multi-year bull market.
And “the charts, as interpreted by Rob Moreno, suggest that the averages are trying to bottom here in preparation for a nice rebound,” Cramer told investors.
Click here for Moreno’s full analysis.
Medical device maker Masimo Corp. is trying to stem the rise of opioid-related deaths in the United States with its non-invasive patient monitoring technology, the company’s founder, Chairman and CEO Joe Kiani told Cramer on Tuesday.
“We hope to have a solution for patients at home that are prescribed opioids, even those with illicit use,” Kiani said in the exclusive interview. “They can connect our device before they go to bed after they’ve taken their opioid, and if something’s gone wrong, hopefully they’ll either be revived by our alarms, or a loved one, or a caregiver, or even maybe the nearest police car with Narcan can be called and be dispatched to save that patient’s life.”
One of eight companies invited to the Food and Drug Administration’s Innovation Challenge to tackle and treat opioid use disorder out of 250 applicants, Masimo has created a product that not only prevents opioid-related deaths in hospitals, but also saves millions of dollars in the process, Kiani told Cramer.
“This system we have here, called the Patient Safety Net, along with either the tethered or untethered version of our product, has been used in Dartmouth-Hitchcock[‘s health-care system] for, now, 10 years,” the CEO said. “They showed … no more ‘dead in bed’ from opioid overdose [in] patients on opioids after surgery, and they saved $7 million a year. So you can save money and save lives.”
Click here to watch Kiani’s full interview.
In Cramer’s lightning round, he zoomed through his responses to callers’ stock questions:
Zillow Group Inc.: “I’m not a fan. I don’t like their plan to … flip houses. I think they picked the absolute top to be able to do that. I think they’ve got to reconfigure. I think they have to accept the fact that some of the business is slowing and own it.”
Cypress Semiconductor Corp.: “Remember, it’s a semiconductor company in a market that is down dramatically. Look, banks, tech, business with China – these are all in a bear market. Cypress yields 3.3 [percent]. When it yields 4 percent, I would actually buy some.”
Disclosure: Cramer’s charitable trust owns shares of Apple.
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