On a recent episode of Mad Money, Jim Cramer criticized the semiconductor sector’s performance on Tuesday, particularly in light of a significant sell-off in semiconductor stocks following disappointing earnings from ASML, which wiped out over $50 billion from its market capitalization. Cramer argued that many on Wall Street fail to grasp the enduring significance of advanced graphics chips in artificial intelligence. He emphasized that as long as innovations and new applications for computing power continue to emerge, the demand for these chips will persist.
“I don’t think the need for speed is going away. In fact, it’s only going to increase, especially when tech companies and utilities are fiercely trying to put up nuclear power plants to meet the energy demands.”
Cramer expressed frustration at how quickly some investors rushed to declare the semiconductor sector in decline.
“There were many money managers and writers falling all over each other just at the close of yesterday, at the closing bell, to write the definitive obituary for this group, even as it’s less of a group than more of like a parliament of owls that’s somehow been combined with a pride of lions, two very different beasts. As I watched and listened, I said to myself, this terrible miss by some abstruse Dutch outfit is going to make people miss out on what could be the next leg of a powerful, semiconductor rally fueled by the wall of worry and skepticism that’s being built right in my face.”
He also pointed out that various industries are only beginning to experience “AI-powered revolutions.” He explained:
“… As Jensen told me, software never dies. As long as there are new inventions and new uses for computer power, there will be more need for these chips. And you can attach them to the software, no matter what the iteration. You just have to keep buying them because you have to keep up. Right now we have revolutions just starting in healthcare, manufacturing, climate change, cybersecurity, autonomous driving, and even robots.”
He further talked about how the current bull market could gain momentum if the tech sector maintains its strength. Cramer highlighted analysis from Jessica Inskip, noting that both the S&P 500 and the Nasdaq-100 are showing promising charts. He pointed out that the market has expanded significantly compared to six months ago, but for this upward trend to persist, Inskip emphasized the need for substantial engagement from tech stocks.
Cramer discussed the weekly performance charts of the Nasdaq 100, which features some of the largest technology companies. Although the index remains in a positive trading cycle, it has not reached new highs like the S&P 500. Inskip mentioned that while the Nasdaq 100 is moving in a favorable direction, it must surpass its July peaks to stimulate a broader market rally. While Cramer acknowledged that tech might not need to lead the market, it still must closely follow the stronger sectors.
8 Cheap Jim Cramer Stocks
Our Methodology
For this article, we compiled a list of nearly 80 stocks that Cramer was bullish on during episodes of Mad Money aired in October. We narrowed the list to 8 stocks that had a forward price-to-earnings ratio of under 15 and were most widely held by institutional investors. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 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).
8 Cheap Jim Cramer Stocks to Invest In
8. Banco Santander, S.A. (NYSE:SAN)
Forward P/E: 5.90
Number of Hedge Fund Holders: 9
Earlier in October, Cramer talked about Banco Santander, S.A. (NYSE:SAN) and said, “If you want a foreign bank, please go for Banco Santander, that’s a real good one.”
Banco Santander (NYSE:SAN) offers a wide range of banking solutions. The bank’s recent performance highlights its growth trajectory, particularly in customer acquisition. In the second quarter, it welcomed over 4 million new customers compared to the previous year, elevating the total customer count to 168 million. The surge in its client base prompted a revision of the bank’s targets for 2024, with expectations now set for high-single-digit revenue growth, a shift from the earlier forecast of mid-single-digit growth. Additionally, the company forecasts a return on tangible equity (RoTE) exceeding 16%, an increase from its previous estimate of just 16%.
In a move that shows its commitment to returning value to shareholders, Banco Santander (NYSE:SAN) announced an interim cash dividend of 10 euro cents per share for 2024 results. This marks a 23% increase compared to the previous year’s dividend. The total amount allocated for interim shareholder remuneration is expected to be approximately €3.050 billion, which represents around 50% of the bank’s attributable profit for the first half of the year. The distribution will be executed with half paid as cash dividends beginning November 1, 2024, while the remaining portion will be allocated through a recently launched share repurchase program.
The company intends to finalize its distribution plans for 2024 earnings in the first quarter of 2025, ensuring that stakeholders remain informed and engaged.
7. Huntington Bancshares Incorporated (NASDAQ:HBAN)
Forward P/E: 13.30
Number of Hedge Fund Holders: 32
Huntington Bancshares Incorporated (NASDAQ:HBAN) was discussed by Cramer recently who called it a “terrific story”.
“Next up, the Columbus-based Huntington Bancshares… the parent company of Huntington Bank, and a company, by the way, we know well. After speaking with CEO Stephen Steinour several times over the last couple years, I recommended this one in early August.
And when the whole market sold off hard after the yen carry trade fell apart, remember that fiasco? Since then, it’s rallied nearly 11%. I felt comfortable recommending Huntington into weakness because we just had Steinour on the show less than a week before in the wake of a very healthy quarter. Steinour told a really positive story, saying that we’re on the verge of a rate-cutting cycle. And after many banks spent last year on risk-weighted assets diets as they recovered from the crisis, that’s mostly over now.
Listen to this, ‘We are incredibly well-positioned in the Midwest, and in addition, we’ve recently expanded in the Carolinas and a bit into Texas. So we have this unique franchise with a lot of growth potential. Columbus itself, our headquarters city, is doing phenomenally well. We’ve been growing deposits every quarter, we’ve grown loans and we’re in a great position to continue to grow and frankly to help the economy and our customers.’
Again, terrific story. Even though Huntington has had a nice run since then, still got a 4.2% yield, plenty of earnings growth on the horizon as interest rates come down.”
Huntington Bancshares (NASDAQ:HBAN) operates as the parent company for The Huntington National Bank, providing a range of banking services across the United States. Recently, the company released its financial results for the third quarter, reflecting growth in various key areas. The report highlighted a sequential rise in net interest income and fee revenues, along with consistent growth in loans and deposits, while maintaining strong credit quality.
Huntington Bancshares (NASDAQ:HBAN) reported earnings per common share of $0.33 for the quarter, which marked an increase of $0.03 from the previous quarter, although it was slightly down by $0.02 compared to the same quarter last year. Net interest income saw an uptick of $39 million, or 3%, relative to the prior quarter; however, it experienced a decline of $17 million, or 1%, compared to the year-ago period. Noninterest income also showed positive movement, increasing by $32 million, or 7%, from the previous quarter, bringing it to a total of $523 million. Year-over-year, noninterest income rose by $14 million, or 3%.
Deposit growth was another highlight in the financial report, with average total deposits climbing by $2.9 billion, or 2%, from the prior quarter, and up $8.3 billion, or 6%, compared to the same quarter last year. Ending total deposits showed a similar trend, increasing by $4.0 billion, or 3%, from the prior quarter and $9.5 billion, or 6%, year-over-year. As of September 30, 2024, the company held $95 billion in cash and cash equivalents, along with available contingent borrowing capacity, which represented 195% of estimated uninsured deposits.
6. VICI Properties Inc. (NYSE:VICI)
Forward P/E: 12.37
Number of Hedge Fund Holders: 33
Cramer has previously discussed VICI Properties Inc. (NYSE:VICI) during a lightning round of Mad Money. Talking about the company, he said, “You got a 5% yield, so it’s a little bit better than treasuries. It’s a well-run company.”
VICI Properties (NYSE:VICI) operates as an S&P 500 experiential real estate investment trust and has a diverse portfolio that includes some of the most iconic destinations in Las Vegas, such as Caesars Palace, MGM Grand, and the Venetian Resort. The company has a total of 93 experiential properties, comprising 54 gaming facilities and 39 additional venues located throughout the United States and Canada. These properties are managed by top industry firms and are all backed by long-term, triple-net lease agreements.
In its Q2 earnings report, VICI Properties (NYSE:VICI) reported revenue of $957 million, marking a 6.6% increase despite economic challenges. EPS also grew from $0.69 to $0.71. By the end of the second quarter, the company had approximately $3.2 billion in total liquidity, which included $347 million in cash and cash equivalents, along with $566 million in estimated proceeds from outstanding forwards. Additionally, the company had $2.2 billion available under its revolving credit facility, which features an accordion option, enabling it to request up to $1 billion in additional lender commitments.
5. LyondellBasell Industries N.V. (NYSE:LYB)
Forward P/E: 12.17
Number of Hedge Fund Holders: 41
While discussing his YEV stocks list on a recent episode of Mad Money, Cramer highlighted LyondellBasell Industries N.V. (NYSE:LYB) noting its yield of 5.62%. He pointed out that companies like this typically perform well when the global economy is robust but often face challenges during economic downturns.
“If there’s a perfect time to buy commodity chemical places like Dow and LyondellBasel, it starts when the Fed is cutting, which is right now… in the past two weeks, the Chinese government has announced the most aggressive stimulus efforts that [it] has put in place since the end of the pandemic. And for once, China is actually putting money in people’s pockets. For a communist regime, they seem to really hate handouts, but they’re finally taking action to bolster their ailing economy, which is good news both for their own companies and for cyclicals worldwide that are levered to the Chinese economy, including… LyondellBasel.
A couple of weeks ago, analysts at JPMorgan published a note on the chemicals group. Basically said that they expect these companies to report weak third-quarter results… The analysts at JPMorgan went on to explain that these stocks have been what we call de-risked, meaning the near-term earnings headwinds are already baked into the share price. If you’re willing to look past that and see further into the future, though… LyondellBasel should be on the road to recovery now that interest rates are coming down. You got to anticipate, anticipate, anticipate, that makes a lot of sense to me.
If, like me, you believe the Fed will continue cutting, then bond yields will come down, too, and economies around the world will reaccelerate, bolstering the commodity chemical business as a whole… LyondellBasel. Well, then you got to pull the trigger.
So here’s the bottom line: In this quiet period before earnings season gets crazy, okay? We got to search for new ideas. These are ideas that represent the highest quality stocks for the current moment, the ones that fit the YEV paradigm: yield, earnings growth, and value.”
LyondellBasell (NYSE:LYB) is engaged in the production of petrochemicals, polymers, and fuels. Recently, on October 17, the company announced its acquisition of APK AG, located in Merseburg, Germany, marking a significant step in its commitment to sustainability within the sector. With this move, the company has become the sole owner of APK, which will be integrated into its operations.
The acquisition is in line with LyondellBasell’s (NYSE:LYB) ambition to advance its innovative solvent-based technology for low-density polyethylene (LDPE). The company plans to further develop this technology, with aspirations to establish commercial plants that will enable the production of high-purity materials. These new materials are expected to cater to applications such as flexible packaging for personal care products, addressing the evolving needs of customers and brand owners in a market increasingly focused on sustainability.
4. Citizens Financial Group, Inc. (NYSE:CFG)
Forward P/E: 13.26
Number of Hedge Fund Holders: 47
Cramer views Citizens Financial Group, Inc. (NYSE:CFG) positively and said that it is among the bank stocks that are nearing pre-Silicon Valley Bank collapse levels. He believes regional banks are moving in a favorable direction. He has highlighted that the shift toward rate cuts by the Federal Reserve will likely benefit these institutions, even if the reductions are gradual.
“It’s a Northeast bank, it’s called Citizens Financial Group. I haven’t focused on it since it was spun off by the Royal Bank of Scotland a decade ago. When you take a closer look at Citizens, it’s got some of the best capital ratios of large regional banks. That matters for a couple of reasons. First, it offers safety. This is how you know Citizens won’t be the next First Republic if we have another banking blow-up. But more importantly, in calmer times, it gives them [the] flexibility to do other shareholder-friendly things, dividends [and] buybacks. In fact, in late July, after hearing all the regional banks report second-quarter earnings, analysts at Deutsche Bank called Citizens Financial their top pick in the sector, citing strong earnings growth potential as net interest margins normalize, growth initiatives pay off like the private bank build-out and their expansion in New York City and mortgage demand bounced back thanks to lower rates. Deutsche Bank analysts also know that Citizen has been held back in recent quarters by some significant one-off items. But management is signaling that there shouldn’t be much more of an impact from that kind of thing going forward. That all sounds real good to me. So count me in as a believer in Citizens Financial.”
Citizens Financial Group (NYSE:CFG) operates as a bank holding company, providing an extensive range of retail and commercial banking services. In its third-quarter report released on October 16, the company reported earnings per share of $0.79, alongside a 5.5% decline in revenue, which totaled $1.9 billion compared to the previous year.
The company’s Private Bank was highlighted in the report as it now holds $5.6 billion in deposits and $4.1 billion in assets under management. The company has also seen significant growth in the New York City Metro region and is preparing to launch a TOP 10 program expected to have a $100 million impact. Bruce Van Saun, Chairman and CEO, emphasized that the balance sheet remains strong, with solid capital, liquidity, funding, and loan loss reserves. Despite the challenges faced in the third quarter, including the effects of forward-starting swaps initiated in July and some fees being deferred to the fourth quarter, management remains optimistic about a strong performance in Q4 and the beginning of 2025.
Additionally, Citizens Financial Group (NYSE:CFG) announced a quarterly dividend of $0.42 per share, which will be payable on November 13 to shareholders on record as of October 30.
3. Schlumberger Limited (NYSE:SLB)
Forward P/E: 12.64
Number of Hedge Fund Holders: 67
Schlumberger Limited (NYSE:SLB) has been called “the best of breed” by Cramer. Here’s what he had to say:
“SLB has not gone up nearly as much as I would’ve expected. Given the fact that oil’s up, I would buy the stock right here. It is the best of breed.”
Schlumberger (NYSE:SLB) is a key player in the energy sector, focusing on carbon management and the integration of various energy systems to address the complexities of today’s energy landscape. In September, the company made significant strides in sustainable lithium production, announcing the successful demonstration of its innovative solution at a plant in Clayton Valley, Nevada. The development is focused on expediting the market introduction of responsibly sourced lithium products.
The proprietary integrated solution merges its expertise in subsurface management with advanced surface engineering technologies, including direct lithium extraction (DLE). The method allows for lithium production at a rate 500 times faster than traditional techniques while utilizing just 10% of the land typically required. Operating at approximately one-tenth the size of a conventional facility, the demonstration plant achieved a verified recovery rate of 96% lithium from brine.
The entire process, from extraction to conversion into technical-grade lithium carbonate, takes only a few hours, in stark contrast to evaporation methods, which can take up to 18 months and often yield recovery rates of 50% or less. By reaching specific technical milestones during this pilot phase, Schlumberger (NYSE:SLB) positioned itself to fully qualify under an earn-in agreement with Pure Energy Minerals Ltd., allowing for the potential acquisition of 100% ownership in the Clayton Valley Project.
On October 16, Barclays lowered the price target on the company stock to $63 from $67 and kept an Overweight rating as part of a preview for Q3 earnings in the energy services sector. Analysts at Barclays believe there is limited downside risk to estimates, suggesting that existing macroeconomic concerns and low expectations are already reflected in the group’s discounted valuations. With the outlook for 2025 resembling that of 2024, the potential for outperformance will rely on the differentiation of businesses and themes that improve earnings visibility in a low-growth environment.
2. The Goldman Sachs Group, Inc. (NYSE:GS)
Forward P/E: 14.40
Number of Hedge Fund Holders: 68
Before The Goldman Sachs Group, Inc. (NYSE:GS) released its earnings report, Cramer said:
“As for Goldman Sachs, where I did work at one point, I think it’s going to blow away the numbers and the stock goes higher.”
Goldman Sachs (NYSE:GS) is a leading financial institution known for its diverse range of services, particularly in investment banking and wealth management. On October 15, the company released its third-quarter earnings, revealing a significant year-over-year increase in earnings per share, which rose by 53%. Total revenue for the quarter reached $12.70 billion, reflecting a 7% growth despite the challenges posed by fluctuating market conditions.
Within the company’s Global Banking & Markets segment, revenue also saw a positive trajectory, increasing by 7% from the previous year to hit $8.55 billion. The growth can be attributed to strong performance in equities, which played a key role in driving results for the segment.
On the same day, the company declared a quarterly dividend of $3, payable by December 30 to the shareholders of record on December 2.
From an operational perspective, Goldman Sachs (NYSE:GS) improved its cost efficiency, reporting an 8% decrease in operating expenses compared to the previous year, totaling $8.32 billion. The efficiency ratio, which serves as an indicator of expense management and operational effectiveness, also showed favorable developments. Additionally, targeted capital allocation allowed the firm to return $1.98 billion to shareholders through a combination of dividends and stock buybacks.
1. General Motors Company (NYSE:GM)
Forward P/E: 4.91
Number of Hedge Fund Holders: 72
Cramer has previously called General Motors Company (NYSE:GM) “tempting”, saying:
“Hey, you know what tempting is? General Motors. They hold an analyst meeting [on] Tuesday. GM’s having a great year. [The] stock’s up 27%. I think the redoubtable CEO Mary Barra will tell a strong story… The company’s been able to put up quality numbers even when interest rates were higher. So who knows how well it can do now that the Fed’s our friend. Holy cow. Hey, by the way, unlike Ford, GM has a substantial buyback, which has clearly helped in stock. By contrast, Ford stock’s down 13% for the year. Given that GM still trades at less than five times earnings, and as long as Barra doesn’t cut the forecast, I think the stock can only go higher.”
General Motors (NYSE:GM) is focused on the development, manufacturing, and marketing of vehicles, including trucks, crossovers, cars, and essential automotive components. At a recent investor event in Spring Hill, Tennessee, Mary Barra highlighted the ongoing evolution of the company’s financial performance, mentioning that profit margins for traditional internal combustion engine (ICE) vehicles have room for further growth. Additionally, she pointed out the accelerating sales of electric vehicles (EVs), noting that profits for 2025 are projected to remain comparable to those of 2024.
In October, General Motors (NYSE:GM) announced that it entered into a partnership with Lithium Americas Corp. to establish a joint venture aimed at financing and developing the Thacker Pass lithium project in Nevada. The collaboration involves an investment of $625 million from the company, which breaks down into $430 million in direct cash contributions and a $195 million letter of credit to bolster the project’s funding. Additionally, the agreement includes a conditional commitment for a $2.3 billion loan from the U.S. Department of Energy, further strengthening the financial foundation of the initiative.
Under the revised agreement, GM will secure a 38% stake in the Thacker Pass project, a shift from a previous commitment of $330 million made under an earlier investment agreement. The latest investment complements General Motors’ (NYSE:GM) earlier contribution of $320 million in February 2023, which granted the company approximately 15 million common shares of Lithium Americas. Furthermore, the company has extended its offtake agreement to cover up to 100% of the production from Phase 1 for a duration of 20 years, while also committing to a new 20-year offtake agreement for 38% of production from Phase 2.
While we acknowledge the potential of General Motors Company (NYSE:GM) 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 GM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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