Jim Cramer, host of CNBC’s Investing Club, said he could not rationalize selling Intel after a 28% Friday drop, while naming Amazon, Starbucks and FedEx among stocks he favored.
CNBC reported that Intel’s recent share offering was intended to fund additional spending and that CEO Lip Bu Tan bought a large amount of the new shares. Cramer said the transaction made him question his judgment: He had focused on the company’s longer-term prospects without giving enough weight to near-term factors.
Cramer described Friday’s selling as “not a clearing event,” based on what he could see. Intel shares were still up nearly 80% for the year, CNBC reported. He said he could not recommend buying the decline.
The Nasdaq fell more than 2% during Friday’s session and was down 4.7% for October to date, CNBC reported, as investors reacted to results from Amazon and Intel. Amazon briefly fell 6% before recovering to a loss of about 2%, CNBC reported. Cramer said the company was in better shape than the initial share-price reaction suggested.
CNBC said Starbucks shares fell more than 2% Friday after the company reported a strong quarter and a positive holiday outlook. Portfolio director Jeff Marks pointed to margin improvements and the company’s estimate that it was about a year ahead of its margin target. Cramer said Starbucks offered the higher growth he wanted for the portfolio.
FedEx shares slipped Thursday after management discussed labor issues, CNBC reported. Cramer said he favored FedEx but might not chase its nearly 3% Friday gain. FedEx Freight, the spun-off company, rose more than 13% after beating revenue and profit expectations and describing its improvement efforts, CNBC reported.
CNBC disclosed that Jim Cramer’s Charitable Trust held long positions in Intel, Amazon, Starbucks, FedEx Freight and FedEx.
