Jim Cramer: These 3 Things Make a 'Cult' Stock

Credit: The Street
Published on April 4, 2019 - Duration: 00:32s

Jim Cramer: These 3 Things Make a 'Cult' Stock

Real Money Stock of the Day, Tesla , has been referred to before as a "cult stock." So, for those who want to stay away from this type of stock, Jim Cramer has some indicators.

Here are the three things that he warns investors to watch out for.

The first thing is that these companies don't have any earnings, they just have revenues.

The second thing?

Cramer says that the companies have accelerating revenue growth.

Which is something that the "growth guys really, really love." And the third?

"The product is considered to be best in class, so therefore they say that it's going to be able to expand and grow into the market cap and grow into the multiple," he said.

"That's what Amazon had.

That's what Tesla has.

Amazon only went from cult stock to earnings stock, but that's what you want to watch for," Cramer said.

Introducing TheStreet Courses!

Financial titans, Jim Cramer and Robert Powell, are bringing their market savvy and investing strategies to you!

Learn how to create tax-efficient income, avoid top mistakes, reduce risk and more!

With our courses, you will have the tools and knowledge needed to achieve your financial goals.

Learn more about TheStreet Courses here.


You are here

Recent related videos from verified sources

The One Metric to Watch When the Banks Report Earnings 00:55
Credit: The Street - Published 19 hours ago 

Why Facebook Investors Shouldn't Be Worried About Companies Pulling Out of Libra 01:19
Credit: The Street - Published 19 hours ago 

You might like