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NEW YORK (TheStreet) -- Making snap judgments is a great way to lose money, Jim Cramer told his Mad Money viewers Thursday. Yet, people keep on doing it anyway. Making money involves tedious homework, not assumptions based on headlines alone.
That was certainly the case with Advanced Auto Parts (AAP), which reported what was immediately panned as a big miss on earnings. But after closer examination, investors quickly realized earnings were just fine at the auto parts retailer, the company just had short-term integration issues with their CarQuest acquisition. Shares ended the day up 5% after their initial losses.
Then there's Cimarex Energy (XEC), which executed a spot secondary offering of six million shares. The markets immediately panicked on the news, before realizing that that deal was opportunistic and not a desperate attempt to raise cash. Shares of Cimarex are now up $11 from where the secondary was priced.
Similar patterns played out with CVS Health (CVS), which made a $12.7 billion acquisition that was panned, then applauded. Likewise with Dollar Tree (DLTR), which missed earnings but only because most of their merchandise is still stuck on boats thanks to the West Coast port strike.