Important points
CNBC’s Jim Cramer on Monday shared his thoughts on five stocks requested by viewers, identifying two speculative opportunities and recommending investors avoid others. Receiving phone calls from viewers is a feature of “Mad Money.” Whenever a caller asks about a stock that Kramer doesn’t know well enough to recommend on the spot or wants to find out more about, he promises to do some “homework” on the stock. Here’s what Cramer had to say about his five recent “homework” assignments. ExlService Holdings EXLS YTD Mountain ExlService’s year-to-date stock performance. ExlService Holdings is a business process outsourcing company that has traditionally helped companies handle back-office functions more affordably. The company is increasingly positioning itself as a data analytics and AI partner that can help customers automate their workflows and make better use of their data. Despite the steady growth, Cramer is wary that AI may automate some of the work that customers previously outsourced to ExlService. While the company is trying to turn AI into an opportunity, he believes investors can find better growth stories elsewhere. “The stock is up nearly 40% from its late June lows, so I think this is a great opportunity to sell and move on to something else,” he said. MakeMyTrip MMYT YTD Mountain MakeMyTrip’s year-to-date stock performance. MakeMyTrip is an Indian online travel platform that allows consumers to book flights, hotels, and other travel services. Kramer’s concern is MakeMyTrip’s reputation. According to FactSet, the company trades at about 83 times next year’s earnings, compared to U.S.-based peer Expedia’s about 14 times earnings and Booking Holdings’ about 18 times earnings. He noted that all three companies face the risk of ultimately disrupting online travel agencies as AI assistants take over more planning and booking tasks. But for investors who want to bet on whether the industry can withstand that threat, Kramer said he prefers cheaper and more familiar options like Expedia and Booking. Ritsu Lab ESTA YTD Mountain Ritsu Lab’s stock price performance from the beginning of the year to the present. establishment Labs is a medical technology company specializing in products used in breast implants and reconstructive surgery. The company says some surgeries can be performed without general anesthesia and in shorter operating times. Cramer said Establishment Labs remains unprofitable eight years after going public, and its most recent quarterly loss was larger than Wall Street expected. The loss prevented Mr. Kramer from recommending it as anything more than a speculative investment. As Kramer writes in “How to Make Money in Any Market,” he believes investors can keep just one speculative position in their portfolio, balanced with a small number of more established stocks and low-cost index funds that track broader markets. “This may be interesting for speculation, but I have to say that I have concerns about this. I don’t like recommending unprofitable companies at this stage of the market,” he said. NVE Corporation NVEC YTD Mountain NVE Corporation’s year-to-date stock performance. NVE is a company specializing in the emerging field of spintronics, which harnesses the spin of electrons to capture, store, and transmit information. The company’s products include magnetic sensors that can be used in applications such as robotics. Kramer liked that the company was profitable, but stressed that NVE is a speculative investment. He noted that the company is small, does not have sell-side analysts, and operates in a highly specialized field. The stock is also up 105% this year already. “It’s still a speculative stock, but it’s a very profitable stock and I don’t think it’s overvalued given its earnings growth,” he said. “Keep in mind that this is a high-risk, high-reward situation.” Ubiquiti UI YTD Mountain Unbiquiti’s year-to-date stock performance. Ubiquiti makes networking equipment and is benefiting from the enthusiasm surrounding building IT infrastructure and AI data centers. After Ubiquiti announced lower-than-expected financial results in May, its stock price plummeted and has remained roughly flat since then. Cramer said the company’s history of violating U.S. sanctions and recent controversies surrounding the company make the stock less attractive. This is especially true because investors have other ways to be exposed to strong demand for networking, he said. “Overall, I don’t want to get into this issue,” he said. “It’s much easier to bet on networking equipment than Ubiquiti. Ubiquiti is a company that’s less talked about and has much less headline risk. Cisco definitely comes to mind.” Subscribe to CNBC Investing Club today to follow Jim Cramer’s every move in the market. Questions about Cramer’s disclaimer? Call Cramer: 1-800-743-CNBC Want to delve deeper into Cramer’s world? Punch him! Mad Money Twitter – Jim Cramer Twitter – Facebook – Instagram Have questions, comments, or suggestions about the Mad Money website? madcap@cnbc.com
