In this article, we discuss 10 inverse Jim Cramer stocks to buy today. If you want to read about some more inverse Jim Cramer stocks to buy today, go directly to 5 Inverse Jim Cramer Stocks to Buy Today.
Jim Cramer is a former hedge fund manager and present host of Mad Money on CNBC who has become one of the most prominent personalities in the finance world due to a combination of prolific stock picking and over-the-top antics that seem to have earned him a cult following on social media. Retail traders, a growing market force in recent years, have not always seen eye to eye with Cramer, and have recently come up with an inverse index, the InverseCramer ETF, that tracks the performance of stocks that have earned bearish calls from Cramer.
According to Quiver Quant, the index has returned 2.36% to investors in the past month, growing at a compound annual growth rate of over 33%. The performance of the benchmark S&P 500 during the time is not much better, which has gained over 5% in the past four weeks, even with heavyweights like Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Alphabet Inc. (NASDAQ:GOOG) making a comeback given the improving economic indicators and brightening prospects of a soft landing by the Fed.
The value in tracking the performance of stocks that Jim Cramer gives bearish or bullish calls on lies in the influence that he has on social media. The equities he discusses on his show often see increased trading volumes the next day. Cramer generated an annual return of over 20% for a decade as a hedge fund manager. In the past few years, he has created a more successful business by delivering content for investors where his stock picks may or may not be successful. The InverseCramer ETF places additional burden on his daily calls on the show.
Our Methodology
These were picked keeping in mind the latest calls that Cramer made on these equities on his Mad Money show aired by news platform CNBC. The firms that Jim Cramer is bearish on but have strong growth prospects and positive ratings from analysts were selected for the list. An extensive database of around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2022 was used to identify the popularity of each stock among hedge funds.
Inverse Jim Cramer Stocks to Buy Today
10. AMMO, Inc. (NASDAQ:POWW)
Number of Hedge Fund Holders: 9
AMMO, Inc. (NASDAQ:POWW) makes and sells ammunition and ammunition component products for sports and recreational shooters. During the Lightning Round of his show on August 18, Cramer was bearish on the stock. Responding to a viewer question, Cramer said that he would not recommend any gun stocks because they “do not make anybody any money”. AMMO recently posted a more than 37% increase in revenue and also announced plans to separate the ammunition and marketplace businesses, a move that will improve margins.
On August 16, Lake Street analyst Mark Smith maintained a Buy rating on AMMO, Inc. (NASDAQ:POWW) stock and lowered the price target to $9 from $12, backing the firm to provide investors with strong growth opportunities in the coming months.
At the end of the second quarter of 2022, 9 hedge funds in the database of Insider Monkey held stakes worth $9 million in AMMO, Inc. (NASDAQ:POWW), the same as in the preceding quarter worth $15 million.
Just like Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Alphabet Inc. (NASDAQ:GOOG), AMMO, Inc. (NASDAQ:POWW) is one of the stocks on the radar of elite investors.
9. Lithium Americas Corp. (NYSE:LAC)
Number of Hedge Fund Holders: 9
Lithium Americas Corp. (NYSE:LAC) operates as a resource firm. Cramer was bearish on the stock during the Lighting Round of his show on August 10. In response to a viewer question about his views on the stock, Cramer stressed that he could not just recommend stocks that had been “perpetual money losers”. The stock has climbed in the past few days after Tesla owner Elon Musk called the lithium business a “license to print money”. The increasing production of EVs, which require lithium for batteries, is a key growth catalyst for the stock in the long run.
On July 6, investment advisory Deutsche Bank maintained a Buy rating on Lithium Americas Corp. (NYSE:LAC) stock and lowered the price target to $33 from $36. Analyst Corinne Blanchard issued the ratings update.
Among the hedge funds being tracked by Insider Monkey, Singapore-based investment firm Himension Capital is a leading shareholder in Lithium Americas Corp. (NYSE:LAC), with 3.3 million shares worth more than $66 million.
8. Indie Semiconductor, Inc. (NASDAQ:INDI)
Number of Hedge Fund Holders: 15
Indie Semiconductor, Inc. (NASDAQ:INDI) markets semiconductor products. The journalist investor has been bearish on the stock in the past few weeks, despite the fact that the firm has been making a lot of money as chip prices show no signs of slowing down despite improving supply chains. In June, Cramer said he knew about a lot of firms making a “ton of money” whose stock was “real cheap” as well. Indie has beaten market estimates on earnings consistently for the last few quarters and expects to cross the profitability barrier in 2023.
On July 20, investment advisory Deutsche Bank maintained a Buy rating on Indie Semiconductor, Inc. (NASDAQ:INDI) stock and lowered the price target to $10 from $11. Analyst Ross Seymore issued the ratings update.
At the end of the second quarter of 2022, 15 hedge funds in the database of Insider Monkey held stakes worth $65 million in Indie Semiconductor, Inc. (NASDAQ:INDI), compared to 17 the preceding quarter worth $56 million.
In its Q3 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Indie Semiconductor, Inc. (NASDAQ:INDI) was one of them. Here is what the fund said:
“Indie Semiconductor, Inc. (NASDAQ:INDI) is a fabless designer, developer, and marketer of automotive semiconductors for automated driver assistance systems, user experience, and electrification applications. Indie leverages its cross-domain semiconductor expertise in analog, processing and power chips to integrate multiple chips and capabilities into a single package and offer its customers lower cost products in a smaller form-factor. Indie Semiconductor, Inc. (NASDAQ:INDI) has strong market share in applications such as Apple CarPlay and ultrasonic parking assist with multiple contracts ramping in the coming quarters in applications such as advanced lighting controls, telematics, and electrification. The stock rose on increasing investor recognition of the longer-term opportunity for the company, especially in light of the current automotive semiconductor supply shortage. Semiconductor content in cars is expected to grow substantially over the coming decade as automated safety features and electrification penetrate an increasing percentage of vehicles.”
7. Allegiant Travel Company (NASDAQ:ALGT)
Number of Hedge Fund Holders: 25
Allegiant Travel Company (NASDAQ:ALGT) is a Nevada-based leisure travel company. The former hedge fund manager has been bearish on the stock in the past few weeks. In June, during the Lightning Round of his show, Cramer said he would rather be invested in established travel stocks like Expedia or Airbnb than Allegiant. Since then, the firm has posted a more than 33% year-on-year increase in revenue and guidance numbers look good as well due to strong bookings data despite industry pressures.
On August 10, Barclays analyst Brandon Oglenski maintained an Overweight rating on Allegiant Travel Company (NASDAQ:ALGT) stock and lowered the price target to $150 from $180, noting that the firm would benefit from continued price gains despite a slowing economy.
At the end of the second quarter of 2022, 25 hedge funds in the database of Insider Monkey held stakes worth $180 million in Allegiant Travel Company (NASDAQ:ALGT), compared to 24 in the previous quarter worth $230 million.
In its Q1 2022 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and Allegiant Travel Company (NASDAQ:ALGT) was one of them. Here is what the fund said:
“Shares of airline operator Allegiant Travel Company (NASDAQ:ALGT) came under pressure starting in Q4 from the rising omicron wave. Subsequently, share prices were further pressured by rising fuel prices driven, in part, by Russia’s invasion of Ukraine. We took the opportunity of near-term weakness to initiate an investment at what appeared to be an attractive discount to our estimate of intrinsic value. We believe Allegiant Travel Company (NASDAQ:ALGT) remains well positioned to benefit from pent-up demand. Leisure travel, where Allegiant is focused, has been recovering first, and Allegiant is differentiated by a more flexible route structure than peers.”
6. Dropbox, Inc. (NASDAQ:DBX)
Number of Hedge Fund Holders: 32
Dropbox, Inc. (NASDAQ:DBX) owns and runs a content collaboration platform. On August 9, during the Lighting Round of his show, Cramer was bearish on the stock, saying that “nothing happens to the stock” and he would “pass” on the option of buying a stake in the firm. Dropbox is one of the most popular file and storage firms on the internet and is priced at relatively cheaper levels compared to other cloud giants. The stock has only dropped 6% year-to-date, while peers in the sector shed as much as 30% or 40% in value.
In late May, Jefferies analyst Brent Thill maintained a Buy rating on Dropbox, Inc. (NASDAQ:DBX) stock and lowered the price target to $30 from $35, noting that the firm was facing macro headwinds along with the rest of the software sector.
At the end of the second quarter of 2022, 32 hedge funds in the database of Insider Monkey held stakes worth $751 million in Dropbox, Inc. (NASDAQ:DBX), compared to 44 in the preceding quarter worth $814 million.
In addition to Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Alphabet Inc. (NASDAQ:GOOG), Dropbox, Inc. (NASDAQ:DBX) is one of the stocks that hedge funds are monitoring amid increasing market volatility.
In its Q3 2021 investor letter, RGA Investment Advisors LLC, an asset management firm, highlighted a few stocks and Dropbox, Inc. (NASDAQ:DBX) was one of them. Here is what the fund said:
“Dropbox really let us down this quarter, not because they did anything wrong, but because during our entire tenure holding this stock, it outperformed in periods where long duration assets (aka higher growth) sold off. This time it did not. Despite people asserting this market bifurcation is about selling growth and buying value, Dropbox shares suffered one of their worst stock market quarters in recent years. It’s hard to identify a specific reason, though one story out there is how some investors thought the company could raise the bar on its 30% targeted operating margin upon achieving those levels. Along with the company’s earnings report, instead of raising the bar, they explained how there is more room to drive margin, but in the mean-time the preference at the company is for investing the potential excesses to drive further growth.
This year, the company will have repurchased nearly 9% of its diluted shares outstanding (perhaps more given the Q4 route in shares) and will have delivered a free cash flow yield upwards of 7.5% on its year-end stock price, while growing upwards of 12%. This is a potent recipe for outstanding returns, yet in a market that’s theoretically seeking cash flow, the stock was punished. We think this is one of the most nonsensical moves of them all and find Dropbox to be an especially compelling opportunity heading into 2022. The top line is certainly growing, as the company continues to withstand competition from Microsoft, Google and Box. Plus management continues to make smart tuck-in acquisition, showing what may emerge as a scalable, repeatable recipe for deepening their relationship with existing customers, thus driving down churn and setting the stage for prolonged ARPU growth. This potential strategy started with HelloSign, and is further validated with the acquisition of DocSend…” (Click here to see the full text)
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Disclosure. None. 10 Inverse Jim Cramer Stocks to Buy Today is originally published on Insider Monkey.
