Jim Cramer, host of Mad Money, shared his thoughts on factors that could lead to market growth in 2025, pointing out some key changes that could benefit investors. He expressed optimism about the shift in leadership at the Federal Trade Commission (FTC) and the Justice Department, particularly with the departure of current FTC Chief Lina Khan, whom he criticized for her harsh stance on large businesses.

“The brooming of Biden’s antitrust regulators as the FTC and the Justice Department, that will be fabulous, fabulous for the market.”

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According to Cramer, Khan’s approach was one of hostility toward any major business deal, regardless of the potential positive effects on the economy or on workers. He argued that with the removal of the old guard, a wave of deals could emerge that would help rationalize various industries.

This, in turn, would give smaller companies in sectors like banking, retail, entertainment, pharmaceuticals, and enterprise software a better chance to compete against larger corporations. Cramer was enthusiastic about the potential for these changes, stating, “Fantastic for the stock market. Just fantastic.”

Cramer also touched on an important issue in the market: a shortage of equities. He noted that the lack of available stock could lead to higher prices. He explained that mergers and acquisitions activity could help remove some of the available stock from the market, reducing supply and potentially driving up stock prices.

“Always remember the stock market is indeed a market and like any other market, when there’s not enough supply, you get higher prices.”

Moving on to the housing market, Cramer discussed the effects of overbuilding, like in Florida, where housing prices have been impacted. He explained that when mortgage rates rise, housing prices tend to drop. This price drop often leads to a wait-and-see approach from buyers, who hold out for even lower prices. As sellers grow more desperate, they typically lower prices further in a bid to move their properties.

“It’s called the cycle, although it hasn’t been operating normally for the last few years. I think 2025 will be the year the cycle reasserts itself and the Fed will win big on this one. Big enough to be able to cut rates slowly but cut nonetheless, which of course is what we need.”

Our Methodology

For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during an episode of Mad Money aired in January. 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).

7 Stocks on Jim Cramer’s Radar

7. Lazard, Inc. (NYSE:LAZ)

Number of Hedge Fund Holders: 19

A caller asked Cramer about Lazard, Inc. (NYSE:LAZ) and commented that as per their research, the company’s shareholders are “sitting prettier than owners of La-Z-Boys going into 2025”. Here’s what Cramer had to say:

“Absolutely. I’ve gotta tell you, I think Lazard’s really inexpensive… I think you’re absolutely right.”

Lazard (NYSE:LAZ) offers financial advisory services, including mergers and acquisitions and capital markets, along with asset management services. In the first nine months of 2024, the company’s financial advisory division saw net revenues reach $1,236 million, marking a 38% increase from $896 million during the same period in 2023. The firm also strengthened its financial advisory team by hiring 16 new managing directors specializing in areas such as restructuring, liability management, and capital solutions.

As reported by Reuters, the company ranked as the ninth most active investment bank globally in mergers and acquisitions during this period, based on fees, according to Dealogic data. According to The Banker, in a memo shared with the Lazard community in September 2023, CEO Peter Orszag outlined his vision for the firm’s long-term growth.

He expressed his ambition to double the company’s revenue by 2030 and increase total shareholder return by 10% to 15% annually through that same period. Additionally, he aims to make Lazard (NYSE:LAZ) more relevant to its clients.

6. Labcorp Holdings Inc. (NYSE:LH)

Number of Hedge Fund Holders: 28

While Cramer noted that at 15 times earnings, Labcorp Holdings Inc. (NYSE:LH) stock seems reasonable, he pointed out that the real issue lies in the healthcare sector itself, as investors these days have a reluctance toward healthcare stocks.

“You know, LabCorp did have a spike over Covid and that was about when I interviewed the CEO. I think the stock at 15 times earnings is fine, but the problem is it’s healthcare and people do not like the healthcare stocks. What can I say?”

Labcorp (NYSE:LH) offers a wide range of laboratory services, including routine and specialty tests such as blood analysis, genetic testing, disease-specific tests, and health services. During its last earnings call, Adam Schechter, Chairman and CEO, expressed confidence in the company’s momentum, noting positive progress in both its diagnostics and central laboratory business.

He highlighted that early developments are expected to drive growth in the fourth quarter and continue into 2025. Schechter also referred to the company’s long-term outlook, which anticipates organic revenue growth of 3.5% to 5.5%, along with an additional 1.5% to 2.5% from inorganic growth. He emphasized that Labcorp (NYSE:LH) remains on track and is entering 2025 with significant momentum and strength.