In this article, we discuss 10 Jim Cramer stocks to watch in August. If you want to see more of Jim Cramer’s latest stock picks, click 5 Jim Cramer Stocks to Watch in August.
Mad Money’s Jim Cramer told investors on July 28 to use their heads rather than emotional rationale when picking stocks in this market. To drive his point home, Cramer pointed towards Mark Zuckerberg’s Meta Platforms, Inc. (NASDAQ:META). He said that Meta Platforms, Inc. (NASDAQ:META) used to be a solid investment when Facebook was the dominant social media platform, and it still made sense to invest in the company when it made several acquisitions including Instagram and WhatsApp. However, investors believed in Mark Zuckerberg and did not see the underlying company fundamentals clearly, which he referred to as the ‘great man theory of investing’.
He observed that Meta Platforms, Inc. (NASDAQ:META) stock has lost about half its value year to date, and the company’s disappointing quarter paired with the macroeconomic backdrop is not doing it any favors. He warned investors to avoid the ‘great man theory of investing’, as it never pans out over the long-term, and in this especially market, due diligence before investment is quite important.
Cramer also noted on July 28 that the Federal Reserve seems to be at the end of its tightening cycle, and investors should utilize this opportunity to strengthen their portfolios or add new positions. He said that with a recession threatening to batter the stock market, the Fed has to stop raising rates, “and that pause means you’ve got to buy stocks”. He stressed that this recession is likely to impact inventory, not employment, which means if the Fed does not issue any more unwelcome guidelines, investors can start pouring into the stock market.
Some of the stocks that Jim Cramer was backing heading into August include Costco Wholesale Corporation (NASDAQ:COST), Occidental Petroleum Corporation (NYSE:OXY), and Johnson & Johnson (NYSE:JNJ).
Our Methodology
We selected these stocks from the Lightning Rounds of Jim Cramer’s Mad Money, dated July 25 and later. We have ranked the list according to the Q1 2022 hedge fund sentiment around each stock, which was gauged from Insider Monkey’s database of over 900 elite hedge funds.
Jim Cramer Stocks to Watch in August
10. ICON Public Limited Company (NASDAQ:ICLR)
Number of Hedge Fund Holders: 30
ICON Public Limited Company (NASDAQ:ICLR) was incorporated in 1990 and is headquartered in Dublin, Ireland. It is a clinical research organization that specializes in outsourced development and commercialization services in Ireland, the rest of Europe, the United States, and internationally. On July 28, Jim Cramer said in the Lightning Round of his show that he loves ICON Public Limited Company (NASDAQ:ICLR) as it makes a lot of money. “I think it’s terrific”, Cramer added. In Q2 2022, the company reported earnings per share of $1.41, missing market consensus by $0.23. The revenue of $1.93 billion increased 121.5% on a year over year basis, in-line with Street forecasts.
On July 29, Deutsche Bank analyst Justin Bowers raised the price target on ICON Public Limited Company (NASDAQ:ICLR) to $295 from $285 and kept a Buy rating on the shares, citing the company’s “rock-solid cost management” for the revised price estimate.
According to Insider Monkey’s data, 30 hedge funds were bullish on ICON Public Limited Company (NASDAQ:ICLR) at the end of the first quarter of 2022, up from 29 funds in the earlier quarter. The collective stakes in Q1 2022 were $1.11 billion, compared to $1.37 billion in the last quarter.
Lately, Jim Cramer is bullish on ICON Public Limited Company (NASDAQ:ICLR), just like Costco Wholesale Corporation (NASDAQ:COST), Occidental Petroleum Corporation (NYSE:OXY), and Johnson & Johnson (NYSE:JNJ).
Here is what Polen International Growth Fund has to say about ICON Public Limited Company (NASDAQ:ICLR) in its Q1 2022 investor letter:
“One of our largest Portfolio positions, and one of the top performers in 2021, ICON is an Ireland-based contract research organization that provides outsourced drug trial services to the pharmaceutical and biotech industries. ICON delivered positive results during the quarter and continues to build on its track record of above-market growth and exemplary profit margins. The company reported that new orders were exceeding current revenues, implying future organic growth at above market rates. During the quarter, the company addressed concerns regarding a potential slowdown in biotech funding, which it has seen no indication of. Short-term stock price volatility aside, we believe ICON will continue to compound earnings growth at a mid- to high-teens rate for the foreseeable future.”
9. Archer-Daniels-Midland Company (NYSE:ADM)
Number of Hedge Fund Holders: 42
Archer-Daniels-Midland Company (NYSE:ADM) is a Chicago-based company that supplies agricultural commodities in the United States, Switzerland, Cayman Islands, Brazil, Mexico, and the United Kingdom. The company operates through three segments – Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition. Jim Cramer on July 27 answered a viewer’s question about Archer-Daniels-Midland Company (NYSE:ADM), saying he likes the stock and would buy it.
On July 26, Archer-Daniels-Midland Company (NYSE:ADM) reported its Q2 2022 results, posting earnings per share of $2.15 and a revenue of $27.28 billion, outperforming market consensus estimates by $0.43 and $2.41 billion, respectively. The company expects ‘very strong’ earnings in the second half of the year, which will lead to approximately $1 billion in share repurchases in 2022.
Baird analyst Ben Kallo on July 27 raised the firm’s price target on Archer-Daniels-Midland Company (NYSE:ADM) to $94 from $87 and maintained an Outperform rating on the shares. The analyst observed that fundamental demand has elevated for the long term on the back of multiple factors such as higher demand for renewable diesel inputs and a soaring demand for feeding the Asian swine population. He also noted that Archer-Daniels-Midland Company (NYSE:ADM)’s management is returning capital to shareholders, in addition to investing in organic growth opportunities.
According to Insider Monkey’s database, 42 hedge funds were long Archer-Daniels-Midland Company (NYSE:ADM) at the end of Q1 2022, with combined stakes worth $625.68 million. Ric Dillon’s Diamond Hill Capital is the biggest stakeholder of the company, with 4.75 million shares worth $429.15 million.
Here is what Diamond Hill Long-Short Fund has to say about Archer-Daniels-Midland Company (NYSE:ADM) in its Q1 2022 investor letter:
“ADM is a leading agricultural processor that also operates a global nutrition business focused on the development of ingredients and flavors for food and beverages, supplements and more. The company’s recent operating results have benefited (unfortunately) from the war in Ukraine as grain prices and agricultural markets globally experienced strong price increases. ADM is positioned well to benefit from the volatility due to its stable North American agricultural base.”
8. Albemarle Corporation (NYSE:ALB)
Number of Hedge Fund Holders: 44
Albemarle Corporation (NYSE:ALB) is a North Carolina-based manufacturer of engineered specialty chemicals. The company operates through three segments – Lithium, Bromine, and Catalysts. Jim Cramer said in a Lightning Round on July 27 that Albemarle Corporation (NYSE:ALB) is one of the best lithium plays, reiterating that it is “a real company”, compared to others in the sector.
On July 18, Albemarle Corporation (NYSE:ALB) declared a quarterly dividend of $0.395 per share, in line with previous. The dividend is distributable on October 3, to shareholders of record on September 16. At the end of June, Albemarle Corporation (NYSE:ALB) announced that it plans to build a lithium processing plant in the United States, which would have a capacity of 100,000 metric tons per year. This is as much as the company produces collectively from all its locations presently.
KeyBanc analyst Aleksey Yefremov upgraded Albemarle Corporation (NYSE:ALB) on July 20 to Sector Weight from Underweight without a price target. The analyst forecasts U.S. chemicals companies to announce “strong” Q2 results, but he warned that the second half of 2022 may prove “tougher”. The analyst upgraded Albemarle Corporation (NYSE:ALB) to factor in ongoing robustness in lithium prices.
Among the hedge funds tracked by Insider Monkey, Paul Marshall and Ian Wace’s Marshall Wace LLP is the leading stakeholder of Albemarle Corporation (NYSE:ALB) as of Q1 2022, with 482,729 shares worth $106.75 million. Overall, 44 hedge funds were bullish on Albemarle Corporation (NYSE:ALB) at the end of the first quarter of 2022, compared to 48 funds in the prior quarter.
Here is what Carillon Tower Advisers has to say about Albemarle Corporation (NYSE:ALB) in its Q3 2021 investor letter:
“Albemarle is a global specialty chemicals company with leading positions in lithium, bromine, and refining catalysts. The firm’s shares outperformed in the quarter, driven largely by the current robust demand environment for lithium used in the manufacturing of electric vehicle batteries. As the global push towards the reduction of carbon emissions continues to gain steam, Albemarle is well positioned to benefit from the accelerating adoption of electric vehicles.”
7. Texas Instruments Incorporated (NASDAQ:TXN)
Number of Hedge Fund Holders: 46
Texas Instruments Incorporated (NASDAQ:TXN) manufactures and distributes semiconductors to electronics designers and manufacturers worldwide. It operates in two segments – Analog and Embedded Processing. On July 28, Mad Money’s Jim Cramer reiterated in a Lightning Round that Texas Instruments Incorporated (NASDAQ:TXN) is an absolute buy after the quarter it recently reported. The company’s third quarter outlook for revenue was in the range of $4.90 billion to $5.30 billion, compared to a $4.65 billion consensus and earnings per share guidance fell between $2.23 and $2.51, versus a $2.15 consensus.
Mizuho analyst Vijay Rakesh on July 27 maintained a Neutral rating on Texas Instruments Incorporated (NASDAQ:TXN) and lowered the price target on the stock to $168 from $175 after the “solid” Q2 results. The analyst still believes Texas Instruments Incorporated (NASDAQ:TXN) faces possible peak margins and higher pricing pressure as industry supply improves ahead of an economic slowdown.
According to Insider Monkey’s data, 46 hedge funds were bullish on Texas Instruments Incorporated (NASDAQ:TXN) at the end of Q1 2022, compared to 53 funds in the preceding quarter. Jean-Marie Eveillard’s First Eagle Investment Management is the leading stakeholder of the company, with 3.3 million shares worth about $622 million.
Here is what Davis Opportunity Fund has to say about Texas Instruments Incorporated (NASDAQ:TXN) in its Q4 2021 investor letter:
“Within technology and communication services, we own a number of online businesses and semiconductor related companies, including Alphabet, Amazon, Intel, Applied Materials and Texas Instruments. Within the realm of high technology, we believe that leadership positions reflect enduring and widening competitive advantages over smaller competitors, with few exceptions. This is because online businesses, as well as semiconductor companies, benefit from economies of scale. An online search and advertising engine will, in general, be more profitable per unit of cost as it grows larger in terms of users and advertising dollars. It is a hub-and-spoke model, in other words, where it is generally not necessary to grow expenses at the same rate that revenues grow beyond a certain threshold. Therefore, returns on capital tend to be higher, the larger and more dominant the online search company is.”
6. Hertz Global Holdings, Inc. (NASDAQ:HTZ)
Number of Hedge Fund Holders: 57
Hertz Global Holdings, Inc. (NASDAQ:HTZ) is a Florida-based vehicle rental company. The company offers its services under the Hertz, Dollar, and Thrifty brands. On July 26, in his show’s Lightning Round, Jim Cramer advised a viewer to “stay on Hertz” and that he would bet on Hertz Global Holdings, Inc. (NASDAQ:HTZ) CEO Stephen Scherr, not against him. In Q2 2022, greater capital flexibility enabled the company to complete a $2 billion share repurchase program and authorize a new $2 billion program moving forward. Shares rose more than 15% on July 28 after the report went live.
Deutsche Bank analyst Chris Woronka raised the price target on Hertz Global Holdings, Inc. (NASDAQ:HTZ) to $38 from $29 and reaffirmed a Buy rating on the shares on July 29. The management’s decision to slash the fiscal 2022 budget for fleet inventory is bolstering investor confidence that things really are different this time, the analyst told investors in a research note.
According to Insider Monkey’s database, 57 hedge funds reported owning stakes in Hertz Global Holdings, Inc. (NASDAQ:HTZ) at the end of March 2022, up from 55 funds in the prior quarter. Tom Wagner and Ara Cohen’s Knighthead Capital is the biggest stakeholder of the company, with 181.45 million shares worth over $4 billion.
In addition to Costco Wholesale Corporation (NASDAQ:COST), Occidental Petroleum Corporation (NYSE:OXY), and Johnson & Johnson (NYSE:JNJ), Hertz Global Holdings, Inc. (NASDAQ:HTZ) is one of the stocks on the radar of Mad Money’s Jim Cramer.
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Disclosure: None. 10 Jim Cramer Stocks to Watch in August is originally published on Insider Monkey.
