Tags: Jim Cramer | stocks | Arconic | Vertex

Jim Cramer: 5 Stock Picks to Stay Safe in Second-Quarter Pullback

By    |   Tuesday, 04 April 2017 12:48 PM

Jim Cramer, host of the investment advice show “Mad Money" on CNBC, said markets may pull back in the next three months after a strong first quarter. In the case of a sell-off, he has five stock picks to stay safe.

“At the very least, we should probably give back some of these big gains, particularly the ones that to me seem artificial, meaning they were created by motivated buyers who moved the stocks themselves in order to enhance their first quarter performance," Cramer said.

The S&P 500 rose 5.5 percent during the first three months of the year, the best quarterly gain since a 6.5 percent rise at the end of 2015. The strong momentum started after Republican Donald Trump won November 8 presidential election on a pro-business platform.

“Cramer's top five names for the second quarter are all first-quarter winners, the top performers in the S&P 500 that should continue their ascents barring any major crises along the way,” CNBC reported.

  1. NRG Energy Inc. (NRG): “Cramer said the country's largest competitive energy provider is still revamping operations, and that it would not surprise him if the stock ticked up even more.”
  2. Vertex Pharmaceuticals Inc. (VRTX): "Vertex has climbed up to $107 here, but ... [it] traded in the $140s back when the market first thought it had developed something good for cystic fibrosis before a setback, so I think this one has more room to run," Cramer said.
  3. Arconic Inc. (ARNC): The former Alcoa is an aerospace and defense manufacturer that is in the middle of a proxy fight with Elliott Management. “We own Arconic for my charitable trust,” Cramer said, “and I've told club members that it simply wouldn't be this high without that fight from Elliott, and that makes the stock a little fraught at these levels, even as it's down four bucks from its highs. It's too cheap on the possibility of a takeover, ... but it's too expensive on earnings."
  4. Activision Blizzard Inc. (ATVI): "Of all the winners so far, I think this is the one that you can buy right here, right now, and then hopefully buy even more of on a pullback," Cramer said of the videogame maker.
  5. Incyte Corp. (INCY): The drugmaker’s partnerships with other pharmaceutical companies has led to speculation of a possible takeover. “I don't recommend a stock solely on the basis of takeover speculation," Cramer said. "But takeover or no takeover, here's where I come down: I actually believe that Incyte sells for a lot less than its key drug franchise is worth, which is why I'm giving you my blessing to buy it into the profit-taking that I think is a natural next step in the wake of the stock's big run today."

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Jim Cramer, host of the investment advice show "Mad Money" on CNBC, said markets may pull back in the next three months after a strong first quarter. In the case of a sell-off, he has five stock picks to stay safe."At the very least, we should probably give back some of...
Jim Cramer, stocks, Arconic, Vertex
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2017-48-04
Tuesday, 04 April 2017 12:48 PM
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