Sell-offs that occur during earnings season often provide great opportunities for investors to build positions in top-notch stocks, CNBC’s Jim Cramer argued Thursday as the market compounded its monthly losses.
“In a sell-off during earnings season, you can’t have a lot of guesswork. You want to be sure you’re buying companies that you absolutely know are doing well,” the “Mad Money” host said. “That’s what’s so great about sell-offs in the reporting period: you’ve got the perfect shopping list because the companies have just told you exactly how they’re doing.”
And while the sell-off might not be over yet, as Cramer’s colleague and technician Mark Sebastian predicted on Tuesday, Cramer spotted some stellar buying opportunities in the widespread weakness.
“I think these are levels, if you have a lot of cash, where you can pick a stock and start nibbling,” he said. “You want a high-quality situation at a discount, where you know the merchandise isn’t damaged, just the stock.”
Right now, four stocks fit the bill, Cramer said: United Continental, Citigroup, UnitedHealth Group and PepsiCo.
United Continental reported very strong third-quarter results on Wednesday, with higher travel demand offsetting higher fuel costs. The United Airlines parent posted profit growth of nearly 30 percent for the quarter and raised its full-year outlook.