CNBC’s Jim Kramer on Thursday gave investors a list of eight software stocks to keep on their shopping lists for the future.
“I am adamant that it is still too early to buy some of these stocks. … But eventually even those disgusting stocks, which used to be high-tech stocks, will become so cheap that they will find a bottom,” Crazy money, “said the host.
“Although I do not see this happening until [Federal Reserve] is ahead in its tightening cycle – and has just begun – these things tend to sneak up on you. They happen when you least expect it, “he added, referring to the Fed’s plan to implement a series of interest rate hikes and tighten its balance sheet to offset inflation.
Kramer’s comments came after the tech Nasdaq Composite fell 2.07% on Thursday. The Dow Jones Industrial Average was down 1.05%, while the S&P 500 was down 1.48%.
To compile a list of investment software stocks, Cramer looked for companies that met the following two criteria:
- Have more than 20% revenue growth
- You have more than 20% operating margins
This method helps to weed out profitable companies from unprofitable ones, which is crucial for the current market, Kramer said.
“The market … can’t wait for companies that don’t make money. No matter how fast you grow, unprofitable businesses have become untouchable,” he said.
Here is Cramer’s list of eight technology purchases for the future:
- Service now
- Salesforce
- ZoomInfo
- Paycom
- Paylocity
- PubMatic
- Final health care
- Clearwater Analytics
Kramer turned down the last two recommendations on the warning list, not as familiar with them as he wanted to be.
“Unlike the other names I mentioned, these two are profitable only on an adjusted basis. When you use GAAP numbers, Clearwater is just perfect, and Definitive Healthcare loses money. So I want to take a closer look before I upload. the table for both, but I think I have to do my homework now, ”he said.
Disclosure: Cramer’s Charitable Trust owns shares in Salesforce.
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