CNBC’s Jim Cramer pulled the curtain back on five reopening games under the radar on Monday as the stock market anticipates a rebound in the American economy and diverts attention from the most talked about recovery stocks.
The reopening thesis was promoted by the federal approval of a coronavirus vaccine by Johnson & Johnson, the third vaccine to be marketed in the United States.
“This is a less in-your-face, but potentially more powerful, reopening [playbook] Since they are being ignored, even though they should have a great year if we can get back to normal by June, the Mad Money host and the airlines said – I mean, can we start swapping these out and dwell on something less obvious? “
On the shopping list are fintech payment company Square, designer Ralph Lauren, cosmetics company Ulta Beauty, real estate investment trust Federal Realty, and automaker Ford.
The more obvious reopening games were cruise lines like Royal Caribbean and airlines like Delta. Investors will find stocks in these industries that are exposed to risk through potential stock offers, as Royal Caribbean announced on Monday, or through limping balance sheets.
Cramer expects his new recommendations to gain momentum in the coming weeks.
“These aren’t exactly opening stealth stocks,” he said. “They’re more like ‘The Purloined Letter’, hidden from the public, and I bet they’ll seem a lot more obvious as they get higher over the next few months.”
The new proposals come after the market rebounded on Monday after the S&P 500 fell 3% over the past two weeks. The S&P 500 started the new week up 2.38% and closed over 3,900. The 30-share Dow index rose 603 points to close at 31,535.51, up 1.95%. The tech-heavy Nasdaq Composite rose 3% to 13,588.83 on Monday after falling more than 6% in the past two weeks.
The US Food and Drug Administration approved Johnson & Johnson’s unique Covid-19 vaccine for emergency use on Saturday. In contrast to the two-shot approach to Pfizer and Moderna vaccines, JNJs will face fewer logistical challenges in distribution.
CEO Alex Gorsky told CNBC on Monday morning that the company expects to ship 100 million doses in the country by early summer and nearly 1 billion worldwide this year.
“That makes me think we’re a lot closer to the end of this long national nightmare, so it’s time to reveal the less obvious reopening games, if only because the more straightforward ones feel a little dubbed,” Cramer said.
Disclosure: Cramer’s charitable foundation owns shares in Ford.
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