Cramer often tells investors not to fall in love with their stocks, because getting too close to their holdings can cloud their judgment. Last week, that got taken to task when Align Technology reported.
“Even though the numbers weren’t that great, the stock actually rallied after initially getting hit. Normally, when I see a stock go higher on seemingly bad news, that tells me that we’ve arrived at a bottom because there’s no one left to sell. That’s not the case this time,” Cramer warned. “If you still own Align Technology, I need you to listen to me: I think you should actually unload some of your position, because I do not like where I think this company could be headed.”
“Look, Align Technology has made many of our viewers a lot of money over the years. But an Align with competitors is a totally different story from an Align with no competitors,” he explained.
And with the stock trading at 35 times next year’s earnings estimates — a concerning multiple if you don’t think Align can meet the guidance, and Cramer doesn’t — this dentistry play is looking more and more risky to the “Mad Money” host.
“Here’s the bottom line for a stock that we have pushed forever: Align Technology was one of the best growth stocks around — it had a superior product and the stock deserved to soar — but now, Align has a bunch of new competitors and that makes this a much less compelling story,” he said. “So, if you own this one, I say take advantage of this recent strength and ring the darned register.”