Jim Cramer: 4 tight-pressure stocks stabilize a market that wanted to collapse

What happens if a company that is not expected to do things well surprises Wall Street with much better profits than expected?

If it's a real good company with a high-priced stock, just about anything. But if this company is supposed to be in trouble and has already disappointed many times, you get a rocket so powerful that you would think that she got a public offer to buy. And when you have several in a day, you can move entire sectors and, to a certain extent, the market itself.

On Wednesday, we do not have one, not two, not three, but four situations and their actions have performed so well that we must ask ourselves how it is possible that these movements occur without notice.

Before I go into the details of the actions in question, let me say what I'm going to say in a context that can help you make money.

The investment process is, when you think about it, quite simple. You like a stock, you buy it. If it goes higher, you can sell it and make a profit.

Same goes in the other direction. If you do not like a title and you think it will go down, you can sell it and, if it goes down, you can buy it back and make money. I know that for many of you, the process of selling short is well known. But since we teach here, I want everyone to be on the same level of equality because there is a complication that some people are not aware of.

When you buy a stock, it's very simple, you store it on your account. When you sell it, you are supposed to have the stock to give to the buyers. Same thing with the seller in the open. He must have the stock to give to the buyer to whom he sells it short. This means that he must first borrow the stock. When the stock goes down, he buys the stock and closes the trade.

Oh, and here is another mistake that makes the transaction less favorable than the immediate purchase. The stock of a failing company stops at zero. The stock of a company that does well? In theory, this can go to infinity.

All of these less favorable problems in short selling can make the short circuit incredibly painful, or even unsustainable, for those who can not stand the pain. This is because an extremely short title of a company that surprises in its reports, can really lose control of what is called a "tight pressing", where those who bet against a stock are struggling to buy it back or cover it. enough stock to buy back at current levels so that it skyrockets.

Today, we have had short presses on so many actions, like Skyworks Solutions (SWKS), New York Times (NYT), Capri Holdings (CPRI), old Michael Kors and Snap (SNAP), which have actually stabilized a market that I think otherwise. really want to go down.

So let's start with Snap, a social media company that I have been harbading for ages. Here is a business that just has not been able to pull right. He missed forecasts and spent hundreds of millions of dollars on long-term contracts to host traffic that seems to have started to dry up. The only thing more disconcerting than the endless gaps and missed new designs was the departure of not one but two CFOs in a very brief period, the last of them having left stock units. restricted that could have been worth a lot of money.

Who would ever do that if the stock would go up?

The stock had become a rent for short sellers.

And then Wednesday morning, out of nowhere, CEO Evan Spiegel, who I think has matured beyond the years since this company was made public last year, has recorded a really excellent quarter, with good growth and a nice stabilization of the number of users. "While 2018 has been difficult in many ways, we are proud of the significant changes we have made to strengthen our business and grow our business over the long term. We brought together a more experienced management team, improved our core product to better serve our community, and built a scalable infrastructure for our advertising industry. He went on to say, "We have done all this by increasing our annual turnover by 43% over the previous year and putting profitability at our fingertips." So on the worries As a result, we could have a serious competitor to Facebook (FB) and Twitter (TWTR) for a few dollars of social media, I'm done with my critics. chandelier, but it's definitely not worth it anymore to be short-circuited.

Then Capri, the old Michael Kors, announced Wednesday morning that a quarter of them had, in my opinion, created the fashion company for a multi-year parade. CEO John Idol has taken over the old Kors brand and added Jimmy Choo, then most recently Versace, two excellent but unserved lines, and I think he's created the next big retail giant. Idol on Wednesday released figures that gave you a multi-year roadmap to make these three brands the envy of the rest of the industry. I have studied these brands and I think they have never been so strong and that the international opportunities are incredibly positive.

The company has moved away from the latest and greatest big logos and I think Idol has overcome the difficulties of the Kors – decimated by Apple (AAPL) watch industry – and now produces some of the most entertaining and whimsical solutions . and luxury goods that are fresh and out of the box. I am a big customer of Jimmy Choo and I can not tell you how many times I have been there in the hope of getting new products to offer to my wife, the main influential Lisa Detwiler, and they never had anything new. M's crazy. Now the lines are so fresh that it's going to cost me a fortune. The multiple price / earnings of the stock is the lowest of the group despite the huge population of influence on the Web. It can go much higher.

The New York Times? What can I say? The president has created his own nightmare of a short pressure by constantly calling him in check. We took a look at it two years ago, at $ 17, and found that Trump had been an incredible incentive for online sales. Today, he produced a quarter that showed that not only did he fail, but that he had become the best choice for the underwriting economy and that the stock had increased by 10% . This is not done because the president is a virtual steering wheel for the old gray lady. All the money that is fit to print.

Finally, there is Skyworks Solutions, a company that was supposed to be crushed by the fact that it is primarily known as an Apple supplier. The shorts have put aside money every quarter and every bad news from Apple.

On Wednesday, however, we witnessed a fantastic quarter and a story, not about the customer's woes he's not allowed to name by agreement, but about the upcoming theme of Skyworks as a dominant player of 5G, the next generation of mobile phones.

What a godsend that Skyworks is moving forward, because so many people have exploded while trying to surf the 5G wave via Qualcomm QCOM, which has many patent lawsuits with Apple that threaten the company at the grbadroots.

Skyworks, on the other hand, has an outstanding record and a fantastic conservative CEO, Liam Griffin. Frankly, I'm a big fan, but I was amazed at the strength of the company. What is the strength? It ignited the entire group of semiconductors, including Intel (INTC), which has been steadily climbing since the beginning of the quarter, and Micron Technology (MU), which has not been good. news but that works like crazy. .

I know that it seems paradoxical to think that we could be led by low pressure actions. However, when do you have four? Let's just say that it makes a lot of sense as an accessory for a day that could have been a lot more difficult if these old ugly ducklings did not become beautiful white swans.