Jim Cramer looks at all the economic possibilities before he considers buying or selling a stock. And that’s a particularly useful approach when the economic outlook is as murky as this one.
For members of the Action Alerts PLUS investing club who were tuned into Jim’s monthly conference call, he offered ideas across the barbell – a portfolio that would be resilient whether the economy goes north or south.
Here are a couple more examples of his ideas should the economy contract:
I don't know if you've witnessed the move in [Bristol-Myers] (BMY) - Get Bristol-Myers Squibb Company Report of late, but it's all about the resurgence of the cancer-fighting Opdivo franchise that those who remember the stock, years ago, when we had it, was a continual source of frustration for me. Well, not anymore. The Opdivo franchise is getting the jump on things. It's starting to actually beat Keytruda in some head-to-heads. Now, Bristol's fabulous CEO has assured me there's going to be room for both Merck's (MRK) - Get Merck & Co., Inc. (MRK) Report Keytruda and for Opdivo, but he does think that there's going to be some very big wins for Opdivo.
Remember, the CEO, who is Dr. Giovanni Caforio, he has committed the company to making that huge acquisition of Celgene. And that's brought them some very good things, not the least of which is an irritable bowel syndrome drug that I think could pay off very, very big … next year. I like it so much at 63. I like it at 62. I like it at 61. Not at 65. OK, because remember, we're supposed to buy these on a dip. [If] you come in at 65, and it goes to 63, and you call in the [Mad Money] Lightning Round, you're going to be unhappy. And I'm not going to let that happen. So you have to wait till it comes back.
Colgate (CL) - Get Colgate-Palmolive Company Report … has been an undermanaged franchise for so long. All they had to do was consider themselves a hygiene company, stop trying to create themselves as a pet food company that sells toothpaste. They need to brand themselves as a hygiene company. I think that it's more attractive than Clorox (CLX) - Get Clorox Company Report and McCormick (MKC) - Get McCormick & Company, Incorporated (MKC) Report because those have run. Covid, I think, makes it so that the company is going to be in play for a long time. I happen to think -- and I don't buy stocks because of this -- but that if I were an activist, I would take a stake in Colgate. They haven't done enough with this franchise. It's undermanaged, underutilized, and could go much higher. I would buy Colgate down a couple of bucks.