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.

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