'RealMoney' Radio Recap: Great Expectations
The expectations game has gotten out of control, said James Cramer Tuesday on his
Texas Instruments (TXN), Halliburton (HAL) and Legg Mason (LM) all reported quarterly results and issued guidance that was "pretty much what we were looking for," said Cramer, but investors sold the stocks anyway.
Cramer blames momentum investors who wanted to see dramatically increased guidance. When that didn't happen, they sold.
It may take until Texas Instruments' midquarter update for its stock to "heal," said Cramer. For Halliburton and Legg Mason, it may take until their next quarterly earnings reports, he said. But, if one has patience, the declines today are an opportunity to buy, he said.Late Tuesday, Texas Instruments was down 7.8% to $28.50. Halliburton was down 3.2% to $59.15, and Legg Mason was down 7% to $101.99. On the flip side of the expectations game, said Cramer, expectations for IntraLase (ILSE), which reported a great quarter, and Du Pont (DD), which reported a quarter that was nothing special, had gotten too negative. Their stocks are up today. St. Joe (JOE) guided down, but its stock was roughly unchanged, he said. Cramer added he would rather buy Halliburton, Legg Mason and Texas Instruments before Du Pont or IntraLase, though. Cramer's Danger Zone stock of the day was Autobytel (ABTL). The company has had a "parade of horribles" this year, including delays in filing its financials, restatements, guidance cuts and a new CFO, he said. Tuesday's announcement that the company has put itself up for sale is the good news, said Cramer. He would sell the stock as he doesn't believe anybody will pay these prices for it, he said. Autobytel traded at $4.59 late Tuesday. Cramer said HMO stocks are down today after Coventry Health Care (CVH), Centene (CNC) and Sierra Health Services (SIE) all reported subpar quarters. Investors are worried about WellPoint (WLP) and Aetna (AET), he said, and are selling the stocks to lock in gains.
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 Plus 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