As the record-hitting market charges into one of the biggest earnings weeks of 2017, CNBC’s Jim Cramer highlighted a unique group stocks that have proved to be major winners.

“The biggest winners so far of the earnings season ahead of what’s going to be an amazing week? It’s the stocks of companies that were supposed to report sub-par earnings. These are the stocks that are really exploding higher,” the “Mad Money” host said on Monday.

First, Cramer turned to the stock of Seagate. Wall Street expected the company, which makes data storage technology, to issue a weak earnings report and give dismal forward-looking guidance; most of the analyst coverage suggested investors hold or sell its stock.

Cramer said the negativity made sense. Seagate’s last two quarters were disappointing for the market and the disk drive maker was seen as being too commoditized.

“But this quarter, Seagate gave you some encouraging signs about its data center business levered to its biggest disk drives,” Cramer said. “No one saw that coming. That’s why this stock rallied so big. It was hated, so it got a monster 12.6 percent move.”

The reaction to Seagate’s report gave many of the semiconductor stocks a lift, from more direct competitors like Western Digital to more tangential names like Texas Instruments.

“These are extraordinary moves all stemming from a better-than-expected quarter from the worst of the worst, Seagate,” the “Mad Money” host said.

Apparel maker VF Corporation also defied low expectations of its quarter. The maker of North Face and Vans delivered an earnings beat on Monday led by strong international results.

But the pivotal moment for VF Corp. was when management spoke about the Vans brand on the post-earnings conference call:

“The underlying passion for Vans across the globe is truly unique,” VF Corp. CFO Scott Roe said. “What gets us most excited is how this deep, emotional connection coupled with the tribal nature of the Vans family will continue to drive exceptional performance.”

“Have you heard anyone say that about Nike lately or Under Armour? No,” Cramer quipped.

Most of the companies that failed to impress with their earnings reports were faced with inflated expectations, the “Mad Money” host noted.

Unilever was outperforming until its latest earnings report, which sent the stock tumbling. Procter & Gamble’s shares faced a similar fate after it reported its quarterly results.

“This is the biggest earnings week of the year. Look over your portfolio. Are hopes low for your stocks? That’s good. Are hopes high? Be very careful,” Cramer advised. “Don’t expect too much from the ones with few enemies and naysayers. Expect the most from the stocks of companies that have disappointed in the past. Most important, if you get a pullback in the one-time disappointers that are now doing well, you’ve got to pounce. In the immortal words of those stock geniuses, the Gershwins: they can’t take that away from you.”

Source: Investment Cnbc
Cramer explains why low hopes have been driving earnings season's winners