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Jim Cramer: PulteGroup Is the Stock to Watch Next Week

This is the stock to watch next week when the Fed raises rates.
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When are stocks so cheap that they won't go down?

Perhaps we find out with PulteGroup (PHM) which JP Morgan (JPM) took to a sell today and talks about the right p-e multiple being about six.

This is astounding to me. Pulte is a premier homebuilder in a period where we have the best employment growth in 49 years. While affordability has gone down let's remember that there was a time when these mortgage rates would have been a godsend.

You have a stock that's already down huge and has round-tripped from a year ago.

But the stock did spend a lot of time in the teens - it is currently at $26 - from 2012 to 2017 and the downgrader must certainly believe that's where it is headed or else why bother.

This is THE stock to watch next week when the Fed raises rates because I believe there has to be a level where this company's stock is just too cheap.

But, like with Micron (MU) , you have a stock that reflects big cuts in estimates that some refuse to recognize.

Moreover, this stock reminds you that we have a ridiculously bifurcated market. We have the homebuilders, automakers and commodity semiconductors all selling in mid-single digits and then you have the rest of the market pretty much trading in the high teens or low twenties except for the hyper growers.

How long can this disparity go on? Will Pulte break down big from here as the analyst thinks? Or did the downgrade call the bottom.

Somehow I don't think we will have all that long to wait to know.

Jim Cramer and the AAP team hold a position in JPMorgan Chase for their Action Alerts PLUS Charitable Trust Portfolio . Want to be alerted before Cramer buys or sells JPM? Learn more now.