• 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
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • 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: Here Are the Stocks That 'Transom' Money Is Buying

They buy and buy and buy. The same stocks. Over and over. No end to it.
By JIM CRAMER
Apr 20, 2020 | 11:23 AM EDT
Stocks quotes in this article: AMGN, KHC, SJM, BABA, AMZN, SHOP, ZM, ROKU, BMY, CPB

We are still dealing with the reverberations from the Great March Crash, the one that brought us down from 28,000 to 18,000 on the Dow. Too many stocks went too low and these stocks want to rally. At the same time there are companies that have little exposure to the economy that are just so strong it's almost unreal: Amgen (AMGN) up to $235 when it battled with $180-190 forever, Kraft Heinz (KHC) and J.M. Smucker  (SJM) making an incredible comeback. Alibaba (BABA) , Amazon (AMZN) and Shopify (SHOP) trading as if they are all being taken over.

This dispersion is a nightmare for people trying to be thoughtful. It's like every day someone wakes up and says, "You know what, I have a good idea, let's buy some Amazon stock..."

In reality though we are seeing something I haven't seen since the 1990s when growth stock mutual funds were outperforming index funds in a major way and so the next thing that happens is they get new money and they keep buying their favorites.

I used to call it "transom money," meaning they would come in on Monday morning and a flood of money would come in on the transom.

The mutual funds that get transom money, as a rule, don't have price targets. They just buy what they have determined to be good stocks. And then they buy some more.

What are they buying endlessly?

Let's take a look:

First favorite: Amazon. Every day we are in lockdown is another day where people realize they need something and they just go on to Amazon and hit buy. In many cases they hit buy and they take a subscription. I took a subscription for Sensodyne the other day. I said to myself why should I always stop at Walgreen's when it can just come to my house when I need it. Sure it has to marinate for 24 hours before I will bring it in. But then it's mine and I haven't had to go anywhere.

Next? Zoom (ZM) : What can I say. It's just too darned easy. I just got the longer zoom subscription and we schedule things constantly and we are truly starting to get a kick out of it. No, it is obviously not as much fun as getting together, but if you have a daughter in Spain and a daughter in Greenwich Village it is really something to have a talk where you look at each other rather than texting.

Third is Roku (ROKU) : The mutual funds buy Roku every day because they think it is the Amazon of television. There is always something on with ROKU and it has taken the place of sports programming. I can't believe how much sports programming I miss. But Roku makes up for it.

Alibaba makes so much sense. The Chinese are back spending, the government has juiced the economy and it's the Amazon of China so why not buy it. These transom mutual funds don't feel there is any level this stock shouldn't trade to. Remember these buyers do not give one whit about valuation. They make one decision: Alibaba is a great company and they just ride the wave. New money in goes to their favorites and Alibaba is a favorite. It's been so long that we have seen this phenomenon that it seems highly unusual that American money can levitate a Chinese stock but that's what is happening.

They love Amgen, too. I think that's because a lot of managers think they stole the psoriasis drug Otezla from Bristol-Myers (BMY) when BMY bought Celgene. They just buy and buy and buy and buy.

Of course they pick which food stock they want to buy. Kraft-Heinz. Smucker. Campbells (CPB) . It really doesn't matter. Pick one. That's about what they do.

It just doesn't seem to matter.

Transom money. They buy and buy and buy. The same stocks. Over and over. No end to it.

(Amazon and Bristol-Myers 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 AMZN, BMY.

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

More from Jim Cramer

Jim Cramer: I Pick the Bulls

Jim Cramer
Jan 19, 2021 3:09 PM EST

My trading strategy? Figure out who is the favorite and calculate the 'line.' He's how that works out today.

Jim Cramer: It's High Time to Call in the Covid Assassins

Jim Cramer
Jan 15, 2021 2:00 PM EST

Enroll the private sector that has the capability of vaccinating en masse and save the kingdom.

Jim Cramer: We Have to Wonder, Are We in Maniaville?

Jim Cramer
Jan 13, 2021 12:05 PM EST

I want to help you get rich, but to get rich carefully. Prudence dictates taking something off the table.

Jim Cramer: We Keep Aiming Higher ... and Higher

Jim Cramer
Jan 12, 2021 4:20 PM EST

Welcome to the world of the bull market, 2021-style, as Tesla and others just keep going higher.

Jim Cramer: Looking for Gold? Go With Science

Jim Cramer
Jan 12, 2021 3:46 PM EST

A potential breakthrough in Alzheimer's. A new device for blood pressure. More vaccines. These are opportunities to cheer in a time of turmoil.

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

  • 11:09 AM EST GARY BERMAN

    Is Copper About to Turn to Rust?

    Below is a very long-term copper chart.  As you...
  • 08:02 AM EST GARY BERMAN

    Tuesday Morning Fibocall for for 1/19/2021

    SPX (Long-Term View) The 1/8/21 high @ 3826.69 i...
  • 09:01 AM EST JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    When it's time to sell, will you act or freeze?
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 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