Published On: Wed, Nov 26th, 2014

Jim Cramer: ‘Netflix Downgrade Was Heresy’

NETFLIX

On CNBC’s Mad Dash segment, Jim Cramer said the Stifel Nicolaus downgrade of Netflix from buy to hold was “heresy, ” although he admits the stock may be too expensive at its current level. It isn’t that Cramer is bullish on Netflix; he thinks Netflix like Amazon, Tesla and other “cult stocks” are priced for perfection and are likely to get sold by the end of the year by money managers in favor of stocks like Celgene or Regeneron. However, Netflix seemed somewhat of a golden boy stock that Wall Street loved.

“Everyone is freaking out” about Workday reporting it expects 40% growth. While that sounds great for any company, the fact this is a step down from 50% to 60% growth rates have causes investors to sell the stock. Cramer said this is yet another example of a “hot” stock that cannot afford even murmur about deceleration, or it will get slammed. Cramer thinks it is likely that investors are getting out of the cloud and going to other tech names like Sandisk, Splunk or Western Digital.

Cramer reiterated his love for Apple, saying it is a stock that should not be traded, but should be a core holding in a portfolio.

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