Jim Cramer recently highlighted a promising start to earnings season, pondering whether the two-year-old bull market can continue its upward trajectory during an episode of Mad Money. To address this, Cramer emphasized the importance of keeping emotions in check, cautioning against complacency. He turned to analysis by Jessica Inskip, a prominent figure in the investment community who currently serves as the Director of Investor Research at StockBrokers.com. Inskip, who co-hosts the Market MakeHer podcast, has made important forecasts, including identifying the bottom in big tech growth stocks earlier this year.
“… She nailed the bottom in big tech growth stocks this spring, and she’s been generally bullish, constructive on the major averages all year. And those are terrific calls. Well, as Inskip sees it, things are looking pretty darn good. But even as the rally’s broadening out, moving away from just the Magnificent Seven to a whole host of smaller stocks, she says, we still need tech to participate if we’re going to get another leg higher. Tech doesn’t have to lead the way anymore, but it has to at least follow the leaders.”
Cramer then shifted the conversation to the broader market, querying the potential of stocks outside the tech giants. He pointed out the value of the S&P 500 Equal Weight index, where all 500 components carry equal importance, contrasting it with the traditional market capitalization-weighted index, which heavily favors a few large companies. Cramer noted that 2024 has been particularly favorable for the 493 other stocks within the S&P 500, as the Equal Weight index has shown impressive performance.
“First, you can see this thing’s been doing great because 2024 has been all about the other 493 stocks in the index. Second, Inksip sees a lot to like here. The trading cycle for the S&P 500 Equal Weight is bullish. “
Cramer mentioned that Inskip is keenly watching for higher highs in this sector. While some technicians may view a rising RSI as a warning sign, Inskip reassures that it is not a concern as long as prices continue to climb. Currently, the S&P Equal Weight index remains well above its key quarterly moving averages, according to Inskip. Cramer reiterated the importance of this Equal Weight perspective, emphasizing that the performance is not overly reliant on the Magnificent Seven, as the broader index is being supported by the remaining stocks.
Turning to the Nasdaq 100, which features the hundred largest non-financial stocks on the Nasdaq, Cramer acknowledged that while Inskip sees it in a bullish trading cycle, it hasn’t yet reached new highs like the S&P. Nevertheless, the quarterly moving averages are still trending upward, providing support. Inskip pointed out that the Nasdaq made a higher high back in July, but for it to gain real momentum, it must surpass that peak. Once that level is breached, she believes it could trigger a broader market rally.
Coming toward the conclusion, Cramer said:
“Bottom line, the charts interpreted by Jessica Inskip are looking pretty darn good for the S&P and the Nasdaq 100… We’ve got a much broader bull market than we had six months ago. But if it’s going to keep running, Inskip says we need to see some meaningful participation from tech.”
10 Best Jim Cramer Stocks To Buy According to Analysts
Our Methodology
For this article, we compiled a list of stocks that Cramer was bullish on during episodes of Mad Money aired in October. We narrowed the list to 10 stocks that were most favored by analysts. We listed the stocks in ascending order of their average analyst price target upside as of October 18. The average price target upside was calculated while the market was open. We also mentioned the hedge fund sentiment around each stock, which was taken from Insider Monkey’s Q2 database of more than 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Jim Cramer Stocks To Buy According to Analysts
10. The Walt Disney Company (NYSE:DIS)
Average Price Target Upside: 15.87%
Number of Hedge Fund Holders: 92
During a previous episode of Mad Money in October, Cramer said that he is a buyer of The Walt Disney Company (NYSE:DIS) stock.
“It’s come down quite a bit. It sells at 18 times earnings. It’s down today because of I think the storms, but you know what? Disney is doing much better than people realize. And it’s about time, people started giving a little more respect. I’m a buyer of it. The analysts are dumping all over it. They’re dumping all over it now. I say buy more Disney.”
Walt Disney Company (NYSE:DIS) is one of the biggest names in the global entertainment industry, engaging in various sectors such as film and television production, streaming services, and theme park operations. On October 15, UBS maintained its Buy rating on the stock with a price target of $120. UBS expects results for the fourth quarter to show challenges in the Parks division while highlighting profitability in direct-to-consumer segments, improved box office performance, and consistent trends in linear television.
The firm projects a year-over-year revenue increase of 7.2%, estimating an EBIT rise to $3.7 billion from $3 billion in the previous year, which could lead to a 33% growth in earnings per share for the quarter. For fiscal year 2024, the firm expects EPS growth exceeding 30%, aligning with management’s guidance of $4.92. Furthermore, mid-single-digit EPS growth is expected for fiscal year 2025, with the potential benefits from the deconsolidation of India assets and cost efficiencies from Hulu expected to create additional opportunities as the year unfolds.
Walt Disney Company (NYSE:DIS) is set to introduce a new attraction entry pass called the Lightning Lane Premier Pass. It allows guests willing to pay between $129 and $449 to enjoy exclusive access to some of the park’s most popular attractions. A limited number of these passes will be available starting October 23 at Disneyland in California, followed by a launch at Disney World a week later.
9. DuPont de Nemours, Inc. (NYSE:DD)
Average Price Target Upside: 17.07%
Number of Hedge Fund Holders: 58
Cramer previously discussed Barclays downgrading DuPont de Nemours, Inc. (NYSE:DD) and the company’s CEO.
“Why does Barclays do this? Why did they downgrade it? Well, it took it to sell after a really nice run that you wouldn’t have caught a penny of if you listened to the analysts. You’d be selling it right now, before the three-way breakup masterminded by Chairman Ed Breen, one of the greatest breakup artists to ever play the game. Seems crazy to me. But I guess Barclays feels that Breen doesn’t know what he’s doing. I wouldn’t take that bet. I say buy DuPont.”
DuPont de Nemours (NYSE:DD) provides technology-driven materials and solutions across a wide range of global markets. The company is engaged in delivering advanced materials that cater to diverse sectors, including electronics, safety, water purification, and various specialty applications. On October 16, it declared a quarterly dividend of $0.38 per share on its common stock, which is set to be distributed on December 16 to shareholders on record by November 29.
During the second quarter, DuPont de Nemours (NYSE:DD) completed the acquisition of Donatelle Plastics, a distinguished company specializing in medical components and devices. The acquisition added over 400 employees to the company’s workforce and integrated Donatelle into the Industrial Solutions sector of the Electronics & Industrial segment.
Donatelle’s advanced technologies advance the company’s capabilities in areas such as medical device injection molding, liquid silicone rubber processing, precision machining, and device assembly. The company has a promising growth trajectory, focusing on therapeutic fields that include electrophysiology, drug delivery, diagnostics, cardiac rhythm management, neurostimulation, and orthopedic extremities.