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Cramer sees an opportunity within the tech sector for a winning trade – CNBC

Workers set up the booth for Alphabet Inc’s Google inside the National Exhibition and Convention Center, the venue for the upcoming China International Import Expo (CIIE), in Shanghai, China, October 28, 2018.

China Daily | Reuters

CNBC’s Jim Cramer said Thursday the stock market’s recent moves have created an opportunity for investors who have technology holdings.

Cramer was referring to Thursday morning’s reversal in equity futures, particularly in the tech-heavy Nasdaq, which closed lower by 2.6% a day earlier. Futures had been lower in what seemed to be a continuation of Wall Street’s rough trading week, before they turned green.

All three major U.S. stock indexes traded in positive territory shortly after the bell. Entering Thursday’s session, they were at their lowest levels in over a month.

“I’m going to make it pretty simple: anything that sells at a price-to-sales that is losing a lot of money, you’re going to get a great chance to lighten up hopefully at the open,” Cramer said before the bell on “Squawk on the Street.” “So, take a look at your portfolio.”

Price-to-sales is a metric used to value a stock. It compares a company’s stock price to how much revenue it’s generating. Investors often must apply it to high-growth technology companies that do not yet turn a profit, making a price-to-earnings a less-than-ideal metric to use.

A lower price-to-sales ratio suggests the company is undervalued.