• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Jim Cramer

Jim Cramer: Finding Any Stocks With No Hair?

After a company reports we all know what's wrong, it's immunized. And that's when you can buy.
By JIM CRAMER Apr 03, 2020 | 02:35 PM EDT
Stocks quotes in this article: M, GPS, EAT, BLMN, JNJ, KO, ABBV, AGN, MKC

It's getting harder and harder to find stocks with no hair on them.

Hair, in this case means there's something wrong that you didn't think about and it could play havoc with the soon to be reported earnings.

I am not talking about the obvious, the hurting retailers like Macy's (M) or Gap (GPS) and the smashed restaurants like Brinker (EAT) or Bloomin (BLMN) .

No, I am talking about stories like Johnsnon & Johnson (JNJ) . Here a company I like very much, it has the best pipeline in the industry and is one of the few Triple A balance sheets in the world. All systems are go and it's the perfect recession stock. Except it isn't anymore because it has a division that sells knee replacements and with every hospital bed taken you have to hold off on that kind of surgery. I think the stock is down enough from its high and will be able to handle the news. But there is always someone out there, some big shareholder, who doesn't know this and decides the company is a lesser company for not having good knee replacement orders even as we know that one day we won't have Covid-19 to worry about.

Same thing happened with Coca-Cola (KO) . I have always felt this to be the ultimate recession-proof stocks...until an analyst recently came out and said that its bottlers may need support and that could send earnings surprisingly lower. It shouldn't be surprised now but the stock still sells at 20 times earnings and that's certainly an awfully high multiple for a company with an open-ended spending problem.

I ran into this issue with one of our favorite club (Action Alerts PLUS) stocks. AbbVie (ABBV) . It's buying Allergan (AGN) , principally for its Botox franchise as vanity is one of the great secular growth themes out there. But now we are hearing that doctors are loath to do non-essential surgery or procedures of any kind and that includes administering botox to look youthful. Society has deemed wrinkles and crow's feet acceptable for the duration.

Or how about the switcheroo in the split up and merger of United Technologies (UTX now RTX) and Raytheon (RTN now RTX). For the longest time United Technologies has been held back by its Otis elevator division because of China's battle with the coronavirus. That's why we had been reluctant to buy it for the trust. Now, though, Raytheon and United Technologies are one (called Raytheon Technologies), giving you a premium aerospace and defense company, something that's not as great as it used to be, though because of its link to travel, Carrier Global, a strong heating ventilation and air conditioning, or HVAC company, at a time when there's a dramatic downturn in construction worldwide, and Otis, the one division I really want because it's focus is China, the strongest are in the world now that it has beaten back Covid-19. Insane.

Finally there's the best recession proof stock in the food group, McCormick (MKC) , which is doing so well because of the stay at home thrust of this era. However, it supplies spices to restaurants and offers food services to institutions that are pretty much closed for business. That's about 25% of the company's sales.

But there is good news here: the home office m.o. has become so powerful that it can overcome any shortfall in those commercial lines. That makes it a terrific stock, except that there's always someone who doesn't know the exposure which is why the stock got clobbered when it reported.

The good news? After a company reports we all know what's wrong, it's immunized. And that's when you can buy.

(Johnson & Johnson and AbbVie are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now.)

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long JNJ, ABBV.

TAGS: Earnings | Investing | Markets | Stocks | Trading | Jim Cramer

More from Jim Cramer

Jim Cramer: I'll Put My Money With 'Boring but Lucrative' Any Day

Jim Cramer
Sep 29, 2021 1:28 PM EDT

Let's look at that recent downgrade of 'dull' Morgan Stanley and see why exciting is best left for the stadiums and amusement parks -- and not stocks.

Jim Cramer: America's Toughest Job? Finding Workers

Jim Cramer
Sep 28, 2021 12:17 PM EDT

It's the question of our time: Where are the people willing to take on these better paying gigs? Let's see what's going on and what we need to happen.

Jim Cramer: Here's How Analysts Can Be Off By a Wide Margin

Jim Cramer
Sep 24, 2021 12:02 PM EDT

Let's look at the reactions to Nike, Costco and Salesforce to see what happens when they're viewed from a real world perspective.

Jim Cramer: It's Pure Insanity That We Don't Make Chips Here in the U.S.

Jim Cramer
Sep 23, 2021 11:05 AM EDT

While the big guns meet at the White House about the global chip shortage, the president and these companies are approaching this all wrong.

Jim Cramer: Go Ahead, Have a Cow, but I Say Powell and Xi Are Bulls

Jim Cramer
Sep 22, 2021 3:51 PM EDT

We rallied, because China's President Xi and Fed Chair Powell made decisions that they knew would lead to rallies.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 10:58 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    "The Tremendous Power of the Sell Button"
  • 02:46 PM EDT STEPHEN GUILFOYLE

    We're Shedding Some of This Holding on Strength

    Check out the Stocks Under $10 portfolio here!
  • 11:33 AM EDT PETER TCHIR

    Thoughts Ahead of the Fed Minutes

    Recent economic and earnings issues are convincing...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login