Jim Cramer, the host of Mad Money, recently pointed out a significant gap in the American education system, emphasizing that financial literacy is rarely taught in schools, from middle school all the way through college. According to Cramer, managing personal finances is one of the most essential skills, especially when it comes to preparing for retirement, hence he laid out a few lessons for his viewers.
“So I’m betting most of you, even if you don’t own individual stocks, still have some money in a 401k plan… They’re offered by your employer and they’re among the greatest tax-deferred investment vehicles out there along with the IRA.”
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However, Cramer was quick to clarify that he does not view the 401k as a perfect solution for everyone. While it does offer valuable tax benefits, including tax-deferred growth, it can also be somewhat of a mixed bag. Explaining what 401k is, he said:
“In plain English, that means you pay no taxes on what you put in and then you never pay a penny of capital gains taxes on the profits you make within your 401k, which allows your gains to compound year after year, decade after decade, totally tax free until you decide to start making withdrawals.”
While this can be a great advantage, Cramer cautioned that there are instances where other retirement options might be more beneficial. He pointed out that in some cases, an Individual Retirement Account (IRA) might be a better option than a 401k, as it offers the same tax-deferred advantages. He also advised that when changing jobs, it is a smart move to roll over your 401k into an IRA.
Cramer advised that individuals should do this whenever they switch employers or find themselves between jobs, ensuring that their retirement savings stay under their control. Cramer recommended opting for a self-directed IRA through a full-service discount brokerage like Fidelity as this gives individuals more direct oversight of their money. He added:
“The bottom line on retirement investing: If the company you work for matches your 401k contributions up to a certain point, take them for all they’re worth. But other than that, an IRA is the superior way to go, especially if your 401k plan doesn’t give you any good investment options.”
10 Stocks on Jim Cramer’s Radar
Our Methodology
For this article, we compiled a list of 10 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on January 24. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 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 Stocks on Jim Cramer’s Radar
10. Realty Income Corporation (NYSE:O)
Number of Hedge Fund Holders: 23
A caller asked if REITs like Realty Income Corporation (NYSE:O) are worth investing in, highlighting the stable dividend income and lower interest rates. Cramer was enthusiastic about REITs and said:
“I, I have been toying with the idea of owning Realty Income because they pay monthly checks. I think it’s a really, really good situation… Realty Income, I really like the idea.”
Realty Income (NYSE:O) is a real estate investment trust (REIT) recognized for its monthly dividend payments, and specializes in net lease properties across multiple sectors. Parnassus Investments stated the following regarding Realty Income Corporation (NYSE:O) in its Q3 2024 investor letter:
“Realty Income Corporation (NYSE:O) is poised to benefit from lower interest rates. Because its commercial tenants are mostly on 10-year leases, the stock’s steady dividend stream is attractive in the current environment of slow deceleration in the economy with rates coming down. In this favorable backdrop, the company also continues to execute well.”
9. VICI Properties Inc. (NYSE:VICI)
Number of Hedge Fund Holders: 35
VICI Properties Inc. (NYSE:VICI) is a real estate investment trust with a portfolio of 93 experiential properties, primarily in the U.S. and Canada, all managed under long-term lease agreements. During the episode, he stated, “VICI, I don’t like the last few things that they’ve bought. I’m not gonna touch VICI.”
When Cramer was asked about VICI (NYSE:VICI) in October 2024, he was a little more positive about it as he said, “You got a 5% yield, so it’s a little bit better than treasuries. It’s a well-run company.”
8. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 43
Discussing Palantir Technologies Inc. (NASDAQ:PLTR) during the episode, Cramer stated:
“Palantir’s going higher. All right. Palantir’s going higher. That’s the way it is. I think that it’s a meme stock. I think it goes to $100. They push it up every day. I think when you get a down day, you just buy it. That’s what they’re gonna do. And I gotta tell you… it is really an unbelievable thing. This is GameStop except for, it has actual revenues and earnings.”
Palantir Technologies Inc. (NASDAQ:PLTR) is a provider of software solutions focused on complex data integration and supporting decision-making processes. Cramer has previously outright called PLTR a cult stock whilst emphasizing its very real revenue. He recently said, “Oh, and, let’s not forget the ontologists at Palantir. Those guys can do no wrong, especially in the eyes of their buddy-buddy investors.”
7. Reddit, Inc. (NYSE:RDDT)
Number of Hedge Fund Holders: 52
A CNBC Investing Club member rang up Cramer and inquired whether Reddit, Inc. (NYSE:RDDT) was a real company to invest in or if it was just a meme stock. Cramer’s response was:
“It is very much a real company. Steve Huffman, the CEO, does a fantastic job… Reddit just went up huge this week. I think you gotta wait for a pullback. Reddit, I would prefer to buy it in the $150-140 range.”
Reddit (NYSE:RDDT) runs a widely-used platform where users can engage in discussions, share content, and take part in various interest-based communities. Since the company went public in March 2024, Cramer has been a fan of it and in December 2024, he remarked:
“I think Reddit’s fabulous. What can I say? I know it’s up a great deal, but I think Steve Huffman’s doing a fabulous job. I’m not a seller.”
Since its IPO, Reddit (NYSE:RDDT) stock has risen more than 320%.
6. Twilio Inc. (NYSE:TWLO)
Number of Hedge Fund Holders: 52
A caller asked if they should hold Twilio Inc. (NYSE:TWLO) for a long time given the company’s business model. This is what Mad Money’s host had to say:
“Yes, I want you to. When I went over the quarter and then I searched through the website, I cannot believe how this company has really become one of the great assistants to small businesses trying to build their business. It’s a great customer relation management tool. I agree with you. I would own it and if it came down, I would buy more. That’s a strong endorsement. But that quarter was really incredibly good.”
Twilio (NYSE:TWLO) offers a customer engagement platform that provides software and APIs for communication services, including messaging, voice, email, and marketing, along with tools to build personalized relationships and manage customer data.
5. American Express Company (NYSE:AXP)
Number of Hedge Fund Holders: 62
With President Trump’s comments toward credit card usury fees, Cramer mentioned American Express Company (NYSE:AXP) and said, “American Express, not that much worry there.”
American Express (NYSE:AXP) offers a range of payment services, including credit and charge cards, banking, expense management, travel services, merchant solutions, fraud protection, and customer loyalty programs. Cramer has taken every chance to express his bullishness about the company before and recently, he said:
“Finally, travel is the number one theme in this country. Hotels just won’t quit, this morning, Hilton announced a true blowout quarter. Expedia gave you a monster quarter this evening. It’s one after another after another. But the best one’s American Express, it’s the ninth-best performer of the year. Plus, it fits the bill for 2025 after a fabulous last quarter.”
4. Capital One Financial Corporation (NYSE:COF)
Number of Hedge Fund Holders: 67
Cramer was bullish on Capital One Financial Corporation (NYSE:COF) and called it his “favorite” and mentioned that he would be a buyer of it.
“Now let me tell you a funny thing here. Capital One is actually my favorite. I put it in the bullpen so to speak. I’m thinking about buying it because of the Discover, you know, because of this Discover merger, which is gonna be so bullish, and because I don’t think there will be usury fees. So I want to go against what the president’s musing was right there and buy Capital One, COF, a really well run, really, really well run credit card, credit card company.”
Capital One (NYSE:COF) is a financial services holding company offering a wide range of products, including credit cards, loans, and banking services, along with advisory and capital markets solutions. It seems that Cramer’s opinion about the company has not changed as he commented in March 2024, “Capital One is terrific. Management is great…I say stick with that one, it is a good company.”
Since then, Capital One (NYSE:COF) stock gained over 37%.
3. Bristol-Myers Squibb Company (NYSE:BMY)
Number of Hedge Fund Holders: 70
A viewer called to ask about Bristol-Myers Squibb Company (NYSE:BMY) and if they should hold it. This is what Cramer had to say:
“No, no, you don’t hold it. You buy more. This COBENFY is this, I’m telling you, this is a radical new drug. It’s the first new drug for schizophrenia. We’ve seen it work much better than the others. No weight gain and I think it’s remarkable. 4% yield and a guy, Chris Boerner, who I think is dynamite at the helm. I’m not telling you to schnitzel, buy, sell, whatever. I like Bristol Myers.”
Bristol-Myers (NYSE:BMY) focuses on creating therapies for a range of diseases in multiple therapeutic areas.
2. PayPal Holdings, Inc. (NASDAQ:PYPL)
Number of Hedge Fund Holders: 90
A caller mentioned that some do not respect PayPal Holdings, Inc. (NASDAQ:PYPL) and Cramer replied:
“Look, I tell you, this person does have respect for PayPal. They have a meeting in February that is gonna blow your socks off. I have to tell you that I think that this guy, Alex Chriss is the real deal. It’s at $89. Buy some now and if it does happen to come down before February, buy more then. I have total respect for PayPal and total respect for Alex. It’s a good stock and a good company.”
PayPal (NASDAQ:PYPL) is a digital payment platform that facilitates transactions for both consumers and businesses. Since the episode was aired, PYPL stock went down over 14%.
Longleaf Partners Fund stated the following regarding PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q4 2024 investor letter:
“PayPal Holdings, Inc. (NASDAQ:PYPL) – Digital payments platform PayPal was a contributor for the quarter and the year. The company delivered strong results, with gross margin dollars continuing to grow in the mid-high single digits for the last few quarters. Effective cost management further contributed to double-digit FCF growth, a key metric in our analysis. PayPal also demonstrated its commitment to enhancing shareholder value by repurchasing shares at a 10% annualized basis in the most recent quarter, leading to even stronger FCF per share growth. Much of what we envisioned at our initial investment has materialized quicker than anticipated. This strong performance has been driven by the improved leadership of relatively new CEO Alex Chriss.”
1. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 165
A caller asked Cramer how he thought companies like Visa Inc. (NYSE:V) would be affected given that President Trump mentioned roller credit card usury fees back. Cramer replied, “Don’t worry about Visa. Visa’s just a kind of a, a transfer system.”
Visa Inc. (NYSE:V) is a technology company specializing in payment solutions. It provides a wide range of services, such as transaction processing, credit, debit, and prepaid card offerings, as well as solutions for international payments, fraud prevention, digital services, and e-commerce payment integrations. At the beginning of February, Cramer said that investors are attracted to the company and stated:
“Here’s one that drives me crazy though, Visa. This stock and its doppelganger MasterCard, run payment networks that take no risk and make billions. Everyone wants to buy now, pay later. That’s what they want, right? You want the buy now pay later outfits.
And look, Affirm is up a lot, not tonight, it is a great company, but a lot of people, I think the big institutions want the Colossus. They want the kings, the credit card companies that can do no wrong with no risk and that are, those are Visa and MasterCard.”
While we acknowledge the potential of Visa Inc. (NYSE:V) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than V but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article was originally published at Insider Monkey.
