Business

This is how Jim Kramer would invest in a potential rebound in cloud stocks

On Monday, CNBC’s Jim Kramer detailed an investment strategy for a group of cloud software companies after the group was hit hard by sector rotations on Wall Street.

The Mad Money host and his team have raised 50 shares in the cloud, from heavyweights like Salesforce to mature players like Okta and recent IPOs like AppLovin and UiPath. All but one of the analyzed companies fell more than 10% from their highs as of Friday’s close. At the time, the average decline was 33%, Kramer said.

Kramer said the recent selloff is reminiscent of a period in late 2018 that proved to be a good buying opportunity for many cloud companies. However, he stressed that it is unclear when this period of weakness will abate and there may be more pain ahead.

For this reason, according to Kramer, investors looking to capitalize on the downturn should focus on those with a “reasonable valuation” for now.

“Eighteen of the 50 names on our cloud-based list have a one-to-one price-to-sales relationship … which I have no problem with,” he said. “That includes Cramer’s pet Salesforce.com, which belongs to my charitable foundation, and fellow cloud king VMWare.”

Cramer said New Relic, which makes software that helps companies track applications and identify and fix bugs, is another promotion to consider right now. Before the year-end sell-off, he said, the stock had dramatically changed.

“In short, if you want to start digging through the wreckage of cheap cloud stocks, well there are enough of them to be worth buying gradually as they fall,” Kramer said.

The additional inventory appears to be reasonably priced when considering the 2023 sales estimates, which is fair to consider, “because 2023 will be next year in a month,” Kramer said. Of the eight companies, Workday, Five9, and Twilio “I love”, Cramer said.

Login Now for the CNBC Investment Club to follow Jim Cramer’s every move in the market. Disclosure: Kramer Charitable Foundation owns shares in Salesforce and


Source link

Read More

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button