CNBC’s Jim Cramer on Wednesday offered his thoughts on whether companies that recently reported their quarterly earnings are investable, based on his newly introduced grading system.
“The main reason this market has become so tough is because we are finally getting earnings that aren’t that hot, and yet Wall Street isn’t taking its usual stance of buying NABAF-released stocks — that’s ‘not as bad to be feared,’”mad money‘ said the host.
He added, “Six months ago, you could get rid of Napaf all the time. Tolerance prevailed in two or three days. It’s not like that anymore.”
To keep pace with this new market, Cramer devised a new way to rank the stocks of companies that recently announced their quarterly earnings.
“There are tons of stocks that can go up now that they’ve fallen so hard from their highs, but we need to figure out what could make those spikes possible,” he said.
This is Cramer’s three-tiered stock rating system:
- Exclamation mark (!): This symbol represents “Good news means that the stock is entitled to rise despite the broader sell-off,” Cramer said.
- A question mark (?): That means the stock is “going down pretty much no matter what,” he said.
- star :
“Earnings get an asterisk if something goes wrong away from the company, you can easily explain it. … So maybe the stock is worth buying here because it might be pardoned later,” Kramer said.
“An exclamation point? Yes. A question mark? No. The star, maybe, just maybe, and that’s where the money can be made after the profits, because they’re the decent guys that aren’t even up and running yet,” Cramer said.
- Here are the stocks he chose to highlight and his score for each:Visa :
- !Microsoft :
- !dead :
- !Boeing :
- ?Texas Instruments :
- *the alphabet