In this article, we discuss the 5 stocks Jim Cramer is recommending. If you want to read our detailed analysis of these stocks, go directly to the 10 Stocks Jim Cramer Is Recommending.
5. Ford Motor Company (NYSE: F)
Number of Hedge Fund Holders: 49
Ford Motor Company (NYSE: F) is ranked fifth on our list of 10 stocks Jim Cramer is recommending. The company is based in Michigan and makes and sells automotives. Last week, Cramer identified the stock as one of the cheapest ones on the market considering the high valuations of some other big firms, noting that the stock was trading at 8.5 times the earnings. He said that the firm had not created value in the past few years but that was changing with a fleet of new EVs in the pipeline and an improving balance sheet. Here is what he said:
“It has a full line of electric vehicles on the way, a rapidly improving balance sheet, and a commitment to stop building cars in countries where it has a long history of losing money. When I think of the new Ford, I don’t think of losses, I think of sold out, as in everything they make seems to be sold out.”
On July 16, investment advisory Bank of America kept a Buy rating on Ford Motor Company (NYSE: F) stock and raised the price target to $18 from $17, noting that the demand for vehicles was increasing in the post-pandemic economy and the firm would benefit.
At the end of the first quarter of 2021, 49 hedge funds in the database of Insider Monkey held stakes worth $2.1 billion in Ford Motor Company (NYSE: F), up from 41 in the preceding quarter worth $1.6 billion.
In its Q1 2020 investor letter, Greenlight Capital Fund, an asset management firm, highlighted a few stocks and Ford Motor Company (NYSE: F) was one of them. Here is what the fund said:
“General Motors (GM) was a disappointment. The damage from last year’s strike consumed most of the cash flow GM would have otherwise generated in 2019. We had expected a strong bounce back in earnings and cash flow in 2020, but the annual guidance, while meeting Wall Street expectations, was worse than we expected. Further, the cash burned during the strike needed to be re-earned in order to protect GM’s investment grade rating. Pre-crisis, there would have been, at best, a minimal share repurchase late in the year. At the analyst day, our hopes that 2020 would finally be the year were dashed. We sold our stock. Over our five-year holding period, we made a 9.6% IRR on GM. In the difficult environment, its most comparable peer, Ford, lost about half its value.”
4. D.R. Horton, Inc. (NYSE: DHI)
Number of Hedge Fund Holders: 50
D.R. Horton, Inc. (NYSE: DHI) is a Texas-based home-building company. It is placed fourth on our list of 10 stocks Jim Cramer is recommending. Last week, the firm was among a bunch of stocks that Cramer said were trading at between six and nine times their earnings. He said the stock was cheap and the share price did not reflect the rise in demand for housing created by the coronavirus crisis as well as the growth of population. The company has a market cap of $33 billion and posted $20 billion in revenue last year. Here is what he said:
“These stocks are all pricing in a future with much higher mortgage rates and no customers, yet they don’t reflect the relentless demand for new homes created by both COVID and plain-old population growth.”
On July 26, investment advisory Wedbush upgraded D.R. Horton, Inc. (NYSE: DHI) stock to Outperform from Neutral and raised the price target up to $125 from $94, noting that the land development and community growth efforts of the firm would soon catch up with demand.
Out of the hedge funds being tracked by Insider Monkey, London-based investment firm Egerton Capital Limited is a leading shareholder in D.R. Horton, Inc. (NYSE: DHI) with 10.2 million shares worth more than $914 million.
