In this article, we will take a detailed look at the 11 Best Jim Cramer Stocks to Buy Now.
Jim Cramer on May 14 during his program on CNBC talked about a rather interesting topic — the resurgence of meme stocks (which Cramer called “lousy”). Cramer talked about how small investors began piling into meme stocks like GameStop and AMC recently, causing a rally in these companies similar to what we saw in 2021.
Cramer Thinks GME Rally is “Irrational”
Jim Cramer said he’d “need” to remind everyone that the stock rally in GameStop and AMC is “irrational” and there’s no reason for these stocks to rally “on their own.”
GameStop VS Best Buy: Cramer Compares
Jim Cramer drew a comparison between GameStop and its competitor Best Buy. Cramer highlighted that over the last four years GameStop’s revenue has oscillated between $5 billion to $6 billion, while Best Buy raked in a whopping $43.5 billion in revenue last year.
When it comes to earnings, Cramer said GameStop made $17 million last year, while Best Buy’s earnings came in at $1.4 billion.
Cramer questioned the logic behind GameStop stock rally and said Best Buy, which also pays a 5% divided, and eclipses GameStop in both revenue and earnings by huge margins, now has a market cap almost similar to GameStop, which doesn’t make sense to him.
Cramer hit the “sell, sell, sell” button on GME and said the latest rally will eventually end, not in a good way.
Methodology
For this article, we decided to see which stocks both Jim Cramer and hedge funds like. We first scanned Insider Monkey’s proprietary database of 933 hedge funds and picked the stocks Cramer has been recommending over the past few weeks and months. From these stocks we chose 11 stocks with the highest number of hedge fund investors.
11. McKesson Corp (NYSE:MCK)
Number of Hedge Fund Investors: 69
Irving, Texas-based McKesson Corp (NYSE:MCK) is a healthcare services company that distributes branded, generic, specialty, biosimilar and OTC pharmaceutical drugs. The stock is up about 16% in 2024 through May 15. Earlier this month the stock hit its new all-time high following McKesson Corp’s (NYSE:MCK) strong guidance for 2025. It expects an EPS of $31.25 to $32.05 for 2025, while the Street consensus was $31.33. This earnings forecast shows earnings growth of about 14% to 17% when compared to fiscal 2024.
Barclays’ Stephanie Davis increased her price target on the stock to $596 from $571. The stock closed trading at $551.58 on May 14. Davis’s price target represents an upside potential of about 4%. Wall Street’s average analyst price target for the stock for the next 12 months is $595, according to data compiled by Yahoo Finance. This enthusiasm is despite McKesson Corp (NYSE:MCK) missing estimates for both EPS and revenue for its fiscal fourth quarter, which it reported on May 7.
Last month, a caller asked Jim Cramer about his advice on selling McKesson Corp (NYSE:MCK) shares. Cramer recommended the questioner to hold on to the stock, saying:
“Oh man, don’t sell McKesson, don’t sell Cencora…..these things are unbelievable. These are the middle people.”
As of the end of the fourth quarter of 2023, 69 hedge funds tracked by Insider Monkey had stakes in McKesson Corp (NYSE:MCK). The most significant stake in McKesson Corp (NYSE:MCK) is owned by Andreas Halvorsen’s Viking Global, worth about $1 billion.
Baron Health Care Fund made the following comment about McKesson Corporation (NYSE:MCK) in its Q3 2023 investor letter:
“Partially offsetting the above was favorable stock selection in pharmaceuticals and health care distributors along with cash exposure in a declining market. Strength in pharmaceuticals and health care distributors was driven by gains from Lilly and McKesson Corporation (NYSE:MCK). McKesson’s stock performed well due to strong financial results in the company’s pharmaceutical distribution and prescription technology solutions businesses, driven in part by higher volumes of GLP-1 medicines and prior authorization technology services related to GLP-1 medicines.”
10. HCA Healthcare Inc (NYSE:HCA)
Number of Hedge Fund Investors: 72
Healthcare facilities company HCA Healthcare Inc (NYSE:HCA) is one of the stocks Jim Cramer recently advised investors to “hang on to.” Cramer acknowledged that the stock’s performance has been “uneven,” but he thinks it’s a “great long-term horse.” Wall Street analysts seem to agree with Jim Cramer. According to Yahoo Finance data, Wall Street analysts expect the stock price to hit $347 over the next 12 months, while its current price stands at $320. This shows the stock has an upside potential of about 9%.
Analysts also believe aging population in America would be one of the notable growth catalysts for the stock in the future. HCA Healthcare Inc (NYSE:HCA) is also a dividend-paying stock, albeit with a low yield.
During the first quarter, HCA Healthcare Inc’s (NYSE:HCA) GAAP EPS came in at $5.93. Revenue jumped about 11.2% year over year to $17.34 billion.
As of the end of the last quarter of 2023, 72 hedge funds tracked by Insider Monkey had stakes in HCA Healthcare Inc (NYSE:HCA). The biggest stakeholder of HCA Healthcare Inc (NYSE:HCA) during this period was Jean-Marie Eveillard’s First Eagle Investment Management which owns a $1.2 billion stake in HCA Healthcare Inc (NYSE:HCA).
L1 Capital International Fund stated the following regarding HCA Healthcare, Inc. (NYSE:HCA) in its fourth quarter 2023 investor letter:
“We continued to add to our investment in HCA Healthcare, Inc. (NYSE:HCA). HCA is the leader in for-profit hospital and outpatient services in the United States. Operating performance will be less impacted by fluctuations in the macroeconomic environment. We have provided a detailed overview of HCA and our investment thesis starting on page 9 of this report.
In the June 2023 Quarterly Report we outlined why UnitedHealth, as the leading scale player with unrivalled depth and breadth of healthcare capabilities, was exceptionally well placed to benefit from ever-growing U.S. health spending while also lowering overall healthcare system costs.
In this report, we would like to continue the healthcare theme by introducing HCA Healthcare (HCA) and outlining why this business is also well placed to benefit from long-term healthcare drivers…” (Click here to read the full text)
9. Progressive Corp (NYSE:PGR)
Number of Hedge Fund Investors: 79
Ohio-based insurance company Progressive Corp (NYSE:PGR) provides personal and commercial auto, personal residential and commercial property, business related general liability and other specialty property-casualty insurance products. The stock is in the limelight as last month it posted strong results for the first quarter of 2024. The results were helped by increased premium costs for many customers. Net written premiums in the quarter jumped 18% from last year to $18.96 billion. In March alone the insurer wrote $7.74 billion in premiums.
Progressive Corp’s (NYSE:PGR) GAAP EPS in the first quarter came in at $3.94, beating estimates by $0.64. Net premiums earned increased by 19.4% on a year-over-year basis to $16.15 billion, missing estimates by $1.06 billion.
Jim Cramer was recently asked about Travelers Companies last month during his program on CNBC. Here is what he said:
“If you want insurance business I am gonna say you buy Progressive. I think Progressive is better.”
Progressive Corp (NYSE:PGR) shares have gained about 32% in 2024 through May 14.
The London Company Large Cap Strategy stated the following regarding The Progressive Corporation (NYSE:PGR) in its first quarter 2024 investor letter:
“The Progressive Corporation (NYSE:PGR) – PGR was up 31% during 1Q as it continues to report better margins and faster growth compared to the industry. PGR’s policy in force (PIF) delivered positive growth, and it achieved necessary pricing actions with existing customers. Profitability remains better than peers as PGR has been successful at lowering ad spending while growing its mix of preferred customers. PGR’s underwriting risk segmentation continues to be a competitive advantage as it has delivered industry-leading accident frequency results.”
8. Broadcom Inc (NASDAQ:AVGO)
Number of Hedge Fund Investors: 91
Broadcom Inc (NASDAQ:AVGO) is fast becoming a notable name in the AI-related semiconductor industry. Broadcom Inc’s (NASDAQ:AVGO) AI-related revenue growth is now expected to clock in at about 35% in fiscal 2024. That figure was once hovering at around 5%. Broadcom Inc (NASDAQ:AVGO) provides custom silicon solutions to Google, as well as many major industry players.
While some circles have voiced their concerns around Broadcom Inc’s (NASDAQ:AVGO) reliance on China revenue, Broadcom Inc (NASDAQ:AVGO) bulls believe a rapid rise in AI-related chips demand will offset China worries. Jefferies recently reiterated its Buy rating on the stock, citing “strong growth” in networking/switch driven by AI. However, Jefferies slashed Broadcom Inc’s (NASDAQ:AVGO) price target to $1550 from $1616. The updated price target also shows an upside potential of about 12%.
A total of 91 hedge funds in Insider Monkey’s database had stakes in Broadcom Inc (NASDAQ:AVGO) as of the end of 2023. The biggest stakeholder of Broadcom Inc (NASDAQ:AVGO) during this period was Ken Fisher’s Fisher Asset Management which had a $2.4 billion stake in Broadcom Inc (NASDAQ:AVGO).
Last month, when asked about Broadcom Inc (NASDAQ:AVGO) during his program, Jim Cramer hit the “Buy, Buy, Buy” button.
Carillon Eagle Growth & Income Fund stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its fourth quarter 2023 investor letter:
“Broadcom Inc. (NASDAQ:AVGO) traded higher after closing on its acquisition of VMware. The company also announced earnings that were relatively in line with estimates with some benefit of better operating expenses. The stock appears to be one of the first real beneficiaries of generative artificial intelligence (AI) with meaningful revenue expected to show up in 2024.”
7. Uber Technologies Inc (NYSE:UBER)
Number of Hedge Fund Investors: 129
Uber Technologies Inc (NYSE:UBER) investors panicked earlier this month when the company posted Q1 results, which showed it swung to a loss in the first quarter. Uber Technologies Inc’s (NYSE:UBER) loss in the period came in at -$0.32 per share, while Wall Street analysts were expecting Uber Technologies Inc (NYSE:UBER) to earn $0.39 per share. Revenue, however, jumped about 15.1% year over year in the quarter to $10.13 billion, surpassing estimates by $40 million. Uber’s loss mainly came on the back of legal settlement and equity declines. Uber Technologies Inc (NYSE:UBER) suffered $505 million unrealized loss on its Aurora investment, and a $123 million loss on its Grab investment. Uber’s Technologies Inc (NYSE:UBER) bulls argue the company operations remained strong in the quarter, producing an income of $172 million, compared to a $262 million loss generated during the same quarter last year.
Last month, when asked about Uber, Cramer said that he “likes Uber here” because according to the CNBC host the stock was “well below its high.”
Insider Monkey’s database of 933 hedge funds shows that 129 funds had stakes in Uber Technologies Inc (NYSE:UBER) as of the end of 2023, compared to 146 hedge funds in the previous quarter.
RiverPark Large Growth Fund stated the following regarding Uber Technologies, Inc. (NYSE:UBER) in its fourth quarter 2023 investor letter:
“Uber Technologies, Inc. (NYSE:UBER): UBER was a top contributor in the quarter following better than expected 3Q23 earnings and 4Q23 guidance. Gross bookings of $35.3 billion were up 21% year over year. Mobility gross bookings of $17.9 billion grew 30% over last year driven by a combination of product innovation and driver availability. Delivery gross bookings of $16 billion were up 16% from last year and continued to be strong throughout the quarter. 1Q Adjusted EBITDA of $1.1 billion, up $576 million year over year, was better than management’s guidance of $1 billion, and the company generated $900 million of free cash flow, up from $358 million last year. Management guided to continuing growth in 4Q Gross Bookings (23.5% growth) and Adjusted EBITDA (of $1.2 billion).
UBER remains the undisputed global leader in ride sharing, with a greater than 50% share in every major region in which it operates. The company is also a leader in food delivery, where it is number one or two in the more than 25 countries in which it operates.1 Moreover, after a history of losses, the company is now profitable, delivering expanding margins and substantial free cash flow. We view UBER as more than a ride sharing and food delivery service; we also see it as a global mobility platform with 142 million users (by comparison, Amazon Prime has 200 million members) and the ability to penetrate new markets of on-demand services, such as package and grocery delivery, travel, and hourly worker staffing. Given its $5.2 billion of unrestricted cash and $5.1 billion of investments, the company today has an enterprise value of $128 billion, indicating that UBER trades at 21x our estimates of next year’s free cash flow.”
6. Apple Inc (NASDAQ:AAPL)
Number of Hedge Fund Investors: 131
When Oracle of Omaha Warren Buffett begins to sell your company shares, know that all is not well. Apple Inc’s (NASDAQ:AAPL) stock is losing ground amid lack of growth in iPhone sales and major AI announcements. Apple Inc (NASDAQ:AAPL) is also exposed to geopolitical risks as it’s the biggest customer of Taiwan Semiconductor (Buffett sold his entire stake in the company last year). Apple Inc (NASDAQ:AAPL) accounts for about 25% of TSM’s revenue. Any disruptions following a possible escalation between US and China in the Taiwan region could directly affect Apple Inc (NASDAQ:AAPL).
Recently, KeyBanc Capital Markets said in a report that early data shows iPhone demand in April was “soft.”
However, a positive note recently came from long-term Apple Inc (NASDAQ:AAPL) bull Dan Ives of Wedbush Securities, who said that latest reports suggest that a partnership between Apple and OpenAI is confirmed and the AI “foundation” for iPhone 16 is forming. Ives maintained an Outperform rating on Apple Inc (NASDAQ:AAPL) with a $250 price target.
Jim Cramer has time and again reiterated that Apple Inc (NASDAQ:AAPL) is stock to own for the long term.
The London Company Large Cap Strategy stated the following regarding Apple Inc. (NASDAQ:AAPL) in its first quarter 2024 investor letter:
“Reduced: Apple Inc. (NASDAQ:AAPL) – Reduction reflects strong performance in 2023 and resulting elevated valuation. We believe the outlook for AAPL remains strong with slow growth in iPhone (now #1 global market share) and faster growth in the higher margin services business. R&D will continue to drive new products and AAPL now has over 2 billion installed devices around the world. While near term earnings expectations appear reasonable, we felt it was prudent to reduce the position size based on risks to valuation.”
