Tensions are running high this earnings season, but investors should remain calm and reject the impulse to buy during the peak of it, Jim Cramer said Friday on CNBC's " Mad Money ."
The main stock in question? Stanley Black & Decker, which plummeted 7 percent Tuesday after the company reported earnings. "This was a totally needless sell-off caused by a bunch of quick-draw McGraw traders who couldn't bother to wait for the conference call," Cramer said.
The "Mad Money" host loves the stock himself and bought it last year for his charitable trust as a play on both the housing bottom and on improvements in manufacturing activity. He also said Stanley had a fabulous management team with massive merger expertise and a "pretty darned cheap stock," selling at 11 times next year's earnings.
But Tuesday's sell-off was spurred on by an excessive runup early on and by over-the-top expectations.
Ahead of earnings, people were expecting great things. Stanley had run up 31 straight points, or 66 percent, from the lows of last October, and the stock had rallied 16 percent year-to-date. Investors were looking for a beat and raise, helped by warm weather and a handful of strong economic data and retail sales.Page 1 of 3 | Next Page