CNBC’s Jim Cramer Thursday provided investors with a list of eight software stocks to keep on their grocery lists for the future.
“I firmly believe that it is still very early to buy some of these stocks. … But eventually, even these heinous stocks, formerly high-flying tech stocks, will become so cheap that they will find a lull.”crazy money“said the host.
“Although I don’t see that happening until [Federal Reserve] it’s later on in its tightening cycle – and it’s just getting started – these things tend to pounce on you. They happen when you least expect it, “she added, referring to the The Fed’s plan implement a series of rate hikes and shrink their balance sheets to offset inflation.
Cramer’s comments come after the heavily tech Nasdaq Composite fell 2.07% on Thursday. The Dow Jones Industrial Average slipped 1.05% while the S&P 500 fell 1.48%.
To come up with the list of investable software stocks, Cramer looked for companies that met the following two criteria:
- Have revenue growth of more than 20%.
- Have more than 20% operating margins
This method helps eliminate profitable companies from unprofitable ones, which is crucial in today’s market, Cramer said.
“The market … has no patience for companies that aren’t making money. No matter how fast you grow, unprofitable companies have become untouchable,” he said.
Here is Cramer’s list of eight tech purchases for the future:
- sales force
- zoom information
- Certainly sanitary
- Clearwater analysis
Cramer cautioned the last two recommendations on the list with a warning that he is not as familiar with them as he would like to be.
“Unlike the other names I’ve mentioned, these two are only profitable on an adjusted basis. When using GAAP numbers, Clearwater is just breaking even and Definitive Healthcare is losing money. So, I want to take a closer look before beat. the table on either one, but I think I have to do some homework now, “he said.
Disclosure: Cramer’s Charitable Trust owns shares in Salesforce.
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