Jim Cramer, host of Mad Money, recently emphasized the importance of long-term investing, urging investors to focus on the growth prospects of certain pharmaceutical stocks while also answering callers’ questions about certain stocks. Cramer acknowledged that stocks often experience cyclical trends, with some sectors falling out of favor temporarily.
“Look, stocks go in and out of style in the Wall Street fashion show. Whole sectors wallow at times. Right now, healthcare’s in some sort of doghouse the likes of which I’ve never seen.”
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Despite the industry’s struggles, Cramer reflected on his observations at the JPMorgan healthcare conference in San Francisco, where he saw many pharmaceutical companies that he believes are not being properly valued by Wall Street. While the present outlook for these companies may not be particularly stellar, he highlighted the strong and lucrative long-term potential they offer.
“Why am I so willing to focus on the so-called out years? Because the long-term possibilities for these companies, frankly, they’re incredible and by the way, incredibly lucrative too, even as the present is good, but not great.”
He pointed to the ongoing progress in the healthcare sector, particularly with GLP-1 drugs, which have the potential to treat more conditions beyond diabetes and weight loss. Additionally, companies are working on developing oral versions of these treatments, which could offer patients more convenient options. Beyond GLP-1 drugs, healthcare companies are expanding their portfolios with new cancer therapies, treatments for eye care and asthma, and experimental drugs for COVID-19.
“The bottom line: Ask yourself what happens if things get better, please. What if the future is brighter than the past? If that’s the case, and I think it is, then you’ll have a lot of winners with these drug and medical device plays.”
9 Stocks on Jim Cramer’s Radar
Our Methodology
For this article, we compiled a list of 9 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on January 14. 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).
9 Stocks on Jim Cramer’s Radar
9. Ardmore Shipping Corporation (NYSE:ASC)
Number of Hedge Fund Holders: 22
Commenting on Ardmore Shipping Corporation (NYSE:ASC), Cramer said:
“I’m not a fan of Ardmore Shipping. I’m not a fan of most of the container and just kind of commercial cargo ships because they tend to be too episodic for me. So I’m going to take a pass.”
Ardmore Shipping (NYSE:ASC) specializes in the global transportation of petroleum products and chemicals, catering to oil majors, oil and chemical companies, traders, and pooling service providers. BIMCO, under its Container Shipping Market Overview & Outlook December 2024, reports that, despite the fastest supply growth and fleet expansion since 2010, the supply/demand balance tightened in 2024.
Ship demand has risen as 90% of the capacity that typically passes through the Suez Canal has been rerouted around the Cape of Good Hope, leading to longer average sailing distances and increased demand for ships. Although average sailing speeds are expected to keep decreasing, which would reduce supply, growth projections suggest the supply/demand balance will remain weaker than in 2019, when freight rates were significantly lower than current levels, once ships return to regular Suez Canal routes.
8. Super Micro Computer, Inc. (NASDAQ:SMCI)
Number of Hedge Fund Holders: 33
Super Micro Computer, Inc. (NASDAQ:SMCI) specializes in designing and producing high-performance server and storage systems. When asked about the company, Cramer stated that accounting irregularities are a signal to sell.
“I have very strict rules in companies that have accounting issues and that is sell. It doesn’t matter. I don’t care, and that’s it. Accounting irregularities equals sell. It’s made me a lot more money and saved me a lot more than any of the rules that I have.”
Super Micro (NASDAQ:SMCI) recently experienced significant turbulence. This followed an unexpected departure by Ernst & Young, its former auditor, which led to potential risks of being delisted from the Nasdaq due to delayed financial filings. As a result of these issues, after peaking in March 2024, shares were down over 70% till the end of December 2024.
Despite the turbulence, the company has taken steps to address the situation, launching an internal investigation that found no evidence of fraudulent activities by executives. Super Micro (NASDAQ:SMCI) has since partnered with BDO as its new auditor and is working diligently to meet the Nasdaq’s deadline of February 25 for filing its financial results.