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Morning Bell With Jim Cramer: Don't Buy SAP Stock

Jim Cramer shares stock market news discussed buying SAP stock, a mask mandate, and investing in volatile markets.

Dow futures gain after stocks extended declines as investors continue to retreat from risk markets amid rising coronavirus infections in the U.S. and Western Europe.

In the last episode of Mad Money, Jim Cramer said that this week is going to be a rocky one for the stock market and advised investors to start buying the bull markets that were just put on sale.

TheStreet's Katherine Ross and Cramer are on Street Lightning discussed buying SAP stock, a mask mandate, and investing in volatile markets. 

SAP Stock: Buy or Sell?

SAP SE  (SAP)  shares plunged the most in more than 25 years Monday after Europe's biggest tech company scrapped its near-term profit targets as it accelerates its shift towards cloud computing.

SAP revealed its third-quarter earnings Sunday, which showed revenues falling 4% to €6.54 billion ($7.67 billion) and operating profits slumping 12% to €1.47 billion.

Cramer said investors shouldn’t buy SAP because it is still too high. He added that this is a “disastrous” quarter for the company.

“They have management issues and they never explained why they have two CEOs,” Cramer said. “The more they digitize with their clients, the more their clients spend less with them.”

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Masks Vs. Lockdowns

On Friday, discount retailer Costco  (COST)  has started to sell coronavirus testing kits on its website.

Priced at $129.99 and $139.99, the retailer's 'Covid-19 Saliva PCR Test Kits' claim to be the gold standard testing method with the most accurate sensitivity and specificity currently on the market, according to the website.

Cramer said that people could either wear a mask or suffer a lockdown, and investors should be prepared for an idea of a national mask mandate.

Healthcare services company HCA Healthcare  (HCA)  was volatile Monday after the company reported its third-quarter results that missed analyst estimates.

The Nashville-based company reported third-quarter revenue of $13.31 billion, a 4.9% year over year increase, on net income of $688 million, or $1.95 per share. Analysts were expecting revenue of $12.9 billion on earnings of $2.32.

Cramer said that investors should invest in volatile markets. He added that there are stocks that can take advantage of COVID-19 and they’re uniquely not in a slowdown from the pandemic.

Costco is a key holding in Jim Cramer's Action Alerts PLUS charitable trust. Want to be alerted before Jim Cramer buys or sells any stock? Learn more from Cramer and his membership team now.