NEW YORK (TheStreet) -- In a companion article, I discuss five stocks that could be bargains if they experience weakness on earnings. Here, I consider three to stay away from, at least for the time being, if they fall hard post-earnings.
While a low-priced stock like Nokia (NOK) could be a speculative buy and a powerhouse like Intel (INTC) could be a screaming buy on downside, investors should run away from Advanced Micro Devices (AMD).
Quick, without the assistance of Google, who is CEO at AMD?
Answer: Rory Read.Not to knock Read, but he most likely was not AMD's first choice to replace Dirk Meyer. Executives from several large companies, including Oracle (ORCL), Hewlett-Packard (HPQ) and EMC (EMC) turned the gig down. First, it's a pretty bad sign when you can't get somebody to leave HP to come to your company. Second, the guy from EMC who spurned AMD, Pat Gelsinger, told The Statesman newspaper in Austin: "I said no, and I said no again." AMD needed a prom date, so, at the very last minute, when all of the cheerleaders and football players had turned the company down, the Board chose Read. He came from Lenovo, where he performed well. He guided the company's entrance into mobile, which is probably why AMD looked at him. The Board ousted Meyer due to a disagreement over the company's mobile strategy. (Translation: There really wasn't one.) About a year after Read's hiring, does anybody really think AMD can beat, let alone compete with, Intel and ARM in the mobile chip market? Enough said. Right now, AMD equals a falling knife. On weakness, it's just that much closer to two bucks a share. While AMD may never present as a buying opportunity, other stocks that report earnings over the next two weeks might. If AMD dumps on the most recent quarter's report, I would stay away. Now, consider Apple (AAPL). A miss this quarter or anything construed by Wall Street as negative could send the stock reeling back below $600. Chances are we do not see a significant new product from Apple until fall. That's when the effects of Q3 (back to school) and Q4 (holiday shopping) start to impact Apple's September and January earnings releases.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV