Why Jim Cramer Plans To Keep Buying PayPal Stock While It's Down

PayPal Holdings Inc PYPL has been trending lower since it was reported that the company was in talks to acquire Pinterest PINS.

Although PayPal announced it was no longer pursuing the acquisition, the stock has continued on its downward trajectory and is now negative for the year.

Jim Cramer bought shares of PayPal for his charitable trust on Monday and he's not done buying.

"PayPal may be a broken stock right now, but just because the stock is broken does not mean the company is broken," Cramer said Monday in a letter to members of CNBC's "Investing Club."

Cramer cited PayPal's constant product improvement and anticipated revenue growth in the 20% range as reasons for the investment. 

Cramer provided PayPal's newly unveiled app as an example of the company's constant product improvement.

See Also: Apple App Store Analysis: Square's Cash App Vs. PayPal's Venmo

Cramer's PayPal investment strategy is to buy in small increments and wait for the positive fundamentals of the company to take back the limelight.

PayPal continued to trade lower this week following Cramer's share purchase, but he reaffirmed his expectations Wednesday via Twitter. 

Sellers often make it frightening to enter a stock while it's down, but "your job as a portfolio manager is to separate fact from fear," Cramer said.

Paypal closing in on an almost 100 point decline from its high. People always ask "why didn't i buy that company's stock when it was down." the answer is that the sellers make it too frightening. Your job as a portfolio manager is to separate fact from fear . Investment club

— Jim Cramer (@jimcramer) November 3, 2021

Paypal will bottom when Affirm stops going up.

— Jim Cramer (@jimcramer) November 3, 2021

PayPal is set to announce its third-quarter financial results after the market closes on Nov. 8.

PYPL Price Action: PayPal has traded as high as $310.16 and as low as $174.81 over a 52-week period.

Photo: courtesy of PayPal.