Jim Cramer says great stocks often decline on earnings reports just because investors don’t do their homework.
Superstars don’t win every game, but over the long-term, they win a lot more than they lose, Jim Cramer told his Mad Money viewers Thursday.
This also rings true for superstar stocks with superstar management teams. Far too often, stocks go down because investors didn’t do their homework. That means far too often, stock declines aren’t justified.
We’ve seen many examples of this phenomenon recently. The headlines of Alphabet’s (GOOGL) – Get Alphabet Inc. Class A Report earnings made the quarter sound horrendous. But the underlying trends of Google’s business didn’t warrant such a panic. Cramer said he trusts Alphabet’s management, and you should too.
Then there’s Meta (FB) – Get Meta Platforms Inc. Class A Report, which investors have written off countless times. First, they feared the company missed mobile, then it was competition from Snap (SNAP) – Get Snap, Inc. Class A Report, then TikTok and most recently, Apple’s (AAPL) – Get Apple Inc. Report new privacy rules. But in every case, Meta eventually overcame their challenges.
Speaking of Apple, Cramer said of course the Covid lockdowns in China will have an impact on Apple. But that doesn’t mean CEO Tim Cook can’t be trusted to deliver for shareholders.
Cramer was also bullish on Ford Motor (F) – Get Ford Motor Company Report, which has also delivered for shareholders by shedding money-losing businesses and doubling down on electric vehicles. As for Microsoft (MSFT) – Get Microsoft Corporation Report, Cramer called the stock’s dip after earnings simply “foolish.“
These great companies don’t get it right every time, Cramer concluded, but those who have done their homework know you simply can’t beat them over the long term.
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