NEW YORK (TheStreet) -- "Strong earnings may have alluded the overpaid Wall Street analysts, but they should be anything but surprising for investors at home," Jim Cramer told the viewers of his "Mad Money" TV show Monday.
He explained why so many "upside surprises" have been occurring this earnings season, and why these "surprises" should be anything but.So how is it that large institutional investors and hedge fund managers missed the surprise earnings of Caterpillar (CAT) and Whirlpool (WHR), along with other companies like Netflix (NFLX), Deckers Outdoor (DECK) and Chipotle Mexican Grill (CMG)? Cramer said it was easy, the analysts simply didn't update their forecasts. Cramer explained that anyone at home, or anyone who watches his show, could easily see that consumer spending has been picking up, and that the emerging markets continue to swell. But most Wall Street analysts only update their outlooks once a quarter, he said, largely ignoring all of the recent good news. Cramer said that for weeks, the executives at Whirlpool have been seeing strength in appliance sales thanks to energy cutting incentives, along with synergies from its Maytag acquisition and strength in Brazil. Yet for the analysts who last updated their outlooks in January, they simply missed it. "If you're waiting for a bell to go off, you're in the wrong game," Cramer told viewers. He said investors need to listen to what companies are saying now and anticipate the move. If they wait to see the positive results, they'll risk missing most of the action. Cramer said the patterns are similar for Caterpillar, which said orders are coming back, and for Netflix, which said it's continuing to see strong growth. The pattern also works for Deckers and Chiptole, where years of growth still remain. "These moves should be anything but surprising," he concluded.
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