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Jim Cramer warns that high-quality low-priced stocks could also be down by a recession.

CNBC’s Jim Cramer warned investors that while there are some stocks with low price-gain multiples on Wednesday that are cheap and therefore investable, it should be noted that they are not always anti-recessionary.

“There are shares with unbearable multiples of prices and profits that can’t be bought at all,” said the host of “Mad Money.” “Then there are some higher quality ones that, if you feel a little more hopeful about the economy, you can justify owning.”

Cramer has highlighted shares of Nucor, Toll Brothers, Ford and Whirlpool that have low price-gain multiples and can be great bets if the economy remains stable.

However, as these stocks fell earlier in the pandemic, they are likely to continue to fall if the market does not recover, Cramer said.

“If we get a hard setback, all four can go much lower. Keep that in mind if you take that risk.” he said.

Cleveland-Cliffs is a low-priced stock that investors should avoid altogether, he added, announcing that the stock has more downsides.

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“When you buy a very low-priced stock with a lot of profit, and yet the things are still going downhill, these stocks seem cheap because the profit calculations … are too high,” he said. “They can go lower and then lower and then down.”

Disclosure: Cramer’s Charitable Trust owns shares in Ford.

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Jim Cramer warns that high-quality low-priced stocks could also be down by a recession.

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