10 S&P 500 Stocks on Jim Cramer’s Radar

2. United Airlines Holdings, Inc. (NASDAQ:UAL)

Number of Hedge Fund Holders: 54

Cramer said that United Airlines Holdings, Inc.’s (NASDAQ:UAL) transformation has been “astounding” though he advised to wait for a pullback before buying the stock.

“… Simply astounding, it’s United Airlines. For the first time in my life, I’ve seen a trade morph into an investment and that’s what United did. The stock’s up 135%… once the airline started removing capacity. United cut back 3% of its promised midyear capacity, I couldn’t believe it. Of course, I can’t explain the whole run.

Problem with Boeing, the production there kept some airlines from being, they were capacity constraints. They couldn’t get the planes they needed. Plus, the long on money short on time thesis that burst on the scene post-Covid never really quit. Oh, and get this, United still sells for less than eight times this year’s earnings. It can actually power higher. It might be a good buy. I would wait for a 5 to 8% pullback.”

United Airlines (NASDAQ:UAL) is a leading provider of air transportation services, offering both passenger and cargo options. In 2024, it performed well, benefiting from industry-wide efforts to cut unprofitable capacity, especially in the summer. CEO Scott Kirby explained that the airline’s domestic capacity was planned with the expectation of industry-wide reductions in the fourth quarter of 2024, which led the airline to expand more slowly than its competitors during the first three quarters when capacity dynamics were less favorable.

Despite Boeing aircraft delivery delays, the airline adjusted by leasing planes and reducing its domestic supply as per Business Insider. Its strong hub structure and the arrival of hundreds of narrow-body aircraft helped it effectively manage these challenges, as noted by Clark Johns of Alton Aviation Consultancy.

Additionally, United Airlines (NASDAQ:UAL) exposure to international markets provided another advantage in 2024. HSBC highlighted that the airline’s international market share significantly surpassed that of its competitors, and demand for international flights remained strong. Specifically, the airline’s transatlantic bookings for the winter of 2024, traditionally a slower period, were 30% higher than pre-COVID levels.