Key Points
CNBC’s Jim Cramer on Monday shared his take on five viewer-requested stocks, finding two speculative opportunities while recommending investors steer clear of the others. Taking calls from viewers is a hallmark of ” Mad Money .” Whenever a caller asks about a stock Cramer doesn’t know well enough to recommend on the spot, or wants to research further, he promises to do his “homework” on the name. Here’s what Cramer had to say about five recent “homework” assignments: ExlService Holdings EXLS YTD mountain ExlService’s year-to-date stock performance. ExlService Holdings is a business-process outsourcing company that traditionally helped businesses handle back-office functions more cheaply. The company is increasingly positioning itself as a data analytics and AI partner that can help customers automate workflows and make better use of their data. Despite solid growth, Cramer is wary that AI could automate some of the work customers historically outsourced to ExlService. While the company is trying to turn AI into an opportunity, he thinks investors can find better growth stories elsewhere. “The stock’s up nearly 40% from its late June lows, so I think you’re getting a great opportunity to sell this one and move onto something else,” he said. MakeMyTrip MMYT YTD mountain MakeMyTrip’s year-to-date stock performance. MakeMyTrip is an Indian online travel platform that lets consumers book flights, hotels, and other travel services. Cramer’s concern is MakeMyTrip’s valuation. According to FactSet, the stock trades at roughly 83 times next year’s earnings, compared with roughly 14 times earnings for U.S.-based peers Expedia and about 18 times earnings for Booking Holdings . He noted that all three face the risk that AI assistants could eventually disrupt online travel agencies by taking on more planning and booking duties. However, for investors willing to bet the industry can withstand that threat, Cramer said he prefers the cheaper and more familiar Expedia or Booking. Establishment Labs ESTA YTD mountain Establishment Labs’ year-to-date stock performance. Establishment Labs is a medical technology company specializing in products used in breast augmentation and reconstruction procedures. The company says some of its procedures can be performed without general anesthesia, and with shorter procedure times. Cramer said Establishment Labs remains unprofitable eight years after going public, and its most recent quarterly loss was larger than Wall Street expected. The losses prevented Cramer from recommending it as anything more than a speculative investment. As Cramer wrote in “How to Make Money in Any Market,” he thinks investors can hold one speculative position in their portfolio, balanced with a handful of more established stocks and a low-cost index fund tracking the broader market. “This could be interesting for speculation, but I have to tell you, I have my reservations about this one. I don’t like recommending unprofitable companies at this stage of the market,” he said. NVE Corporation NVEC YTD mountain NVE Corp’s year-to-date stock performance. NVE is a company specializing in the nascent field of spintronics, which uses the spin of electrons to acquire, store and transmit information. Its products include magnetic sensors that can be used in applications including robotics. While Cramer liked that the company was profitable, he stressed that NVE is a speculative investment. He noted that the company is tiny, has no sell-side analyst coverage, and operates in a highly specialized field. Shares have also already surged 105% this year. “While this is another speculative stock, it’s one that’s quite profitable and given the earnings growth, I don’t even think it’s that expensive,” he said. “Just keep in mind that this is a high-risk, high-reward situation.” Ubiquiti UI YTD mountain Unbiquiti’s year-to-date stock performance. Ubiquiti makes networking equipment and has benefited from enthusiasm surrounding IT infrastructure and the AI data-center buildout. Shares plunged after Ubiquiti reported weaker-than-expected results in May and have largely traded sideways since. Cramer said the company’s history of U.S. sanctions violations , coupled with a more recent controversy involving the company, dampen the stock’s appeal. This is especially true, he said, because investors have other ways to gain exposure to strong networking demand. “Overall, I don’t want to stick my neck out on this one,” he said. “There are much easier ways to bet on networking equipment than Ubiquiti, companies that are low drama, with much less headline risk. Cisco sure comes to mind.” Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market. Disclaimer Questions for Cramer? Call Cramer: 1-800-743-CNBC Want to take a deep dive into Cramer’s world? Hit him up! Mad Money Twitter – Jim Cramer Twitter – Facebook – Instagram Questions, comments, suggestions for the “Mad Money” website? madcap@cnbc.com
