Jim Cramer, the host of Mad Money on CNBC and the head of the CNBC Investing Club, listed two issues with companies that fail to give preliminary guidance when they know they are going to miss a quarter’s expectations.
According to Cramer, it is okay for a company to underperform expectations. However, he is annoyed that companies that are aware of the weak performance are neglecting to disclose the company’s actual health before filing quarterly reports.
Companies often report preliminary results in between quarters in which they revise their financial guidance (upwards or lower) for the quarter, thereby giving further clarity to investors on a company’s actual financial position.
While Cramer has not specified which company he is referring to, respondents are guessing it is discount retailer Walmart (WMT), which reported weaker-than-expected Q1FY23 results, leading to an 11.4% plunge in its stock price.
Audiences are also upset that following Cramer’s advice has burnt their portfolios, completely losing trust in his views. Meanwhile, others are demanding that he give out more pertinent advice going forward.
While it’s difficult to make an intelligent stock pick amid the current market volatility and economic uncertainty, investment advisors are burdened with the daunting task of weathering the storm with profitable calls.
Year to date, all the broader stock market indexes are in the red. The S&P 500 (SPX) is down 14.70%, the Dow Jones Industrial Average (DJIA) is down 10.70%, and the tech-heavy Nasdaq 100 (NDX) is down 23.80%.
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