We recently published a list of Jim Cramer Recently Shed Light on These 9 Stocks. In this article, we are going to take a look at where Comfort Systems USA, Inc. (NYSE:FIX) stands against other stocks that Jim Cramer recently highlighted.
Jim Cramer, host of Mad Money, recently discussed a possible looming energy crisis in the U.S. that has taken many by surprise. He warned that if the country doesn’t act swiftly, it will soon be overwhelmed by an energy shortfall. According to Cramer, we need to tap into every available energy source including natural gas, wind, geothermal, and hydroelectric power. However, he stressed that the most critical energy source right now is nuclear power. He added:
“Crisis comes down to the fact that we had no real industrial growth in this country for decades so we haven’t had to build much energy infrastructure. Now all of a sudden these data centers start coming online like the ones that will be part of Stargate, the Oracle, SoftBank, OpenAI project… And these data centers consume insane amounts of electricity. It’s a level of demand that nobody saw coming. So after years where we spent more time decommissioning power plants and building new ones, we suddenly gotta go back into growth mode.”
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Cramer went on to discuss an energy source that many are reluctant to consider: coal. While it may seem counterintuitive, he argued that coal could make a comeback in the U.S. energy mix.
“When the president gave his inaugural address on Monday, he declared a national emergency aiming to produce more domestic fossil fuels, including coal. Once the mainstay utility fuel, coal has been phased out year after year after year because it is terrible for the environment. 10 years ago, coal-based fuel was responsible [for] about 33% of electricity. Now it’s fallen to 15%.”
Yet, with the push to decommission nuclear plants, and the rising cost of natural gas, Cramer suggested that coal might need to be reintegrated into the energy mix. He argued that, despite the environmental drawbacks, the demand for power is now so great that coal’s long decline could be nearing its end.
“Under this president, coal could have… a renaissance. Sure, coal’s time has come and gone, but it will come again because the data center inspired energy crisis really is so pressing that there’s not really a choice anymore. Yes, the demand is that great, [and] we so foolishly mothballed good nuke plants that it wouldn’t surprise me if coal’s long decline may have finally run its course.”
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 22. 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).
An engineer inspecting a newly renovated electrical installation.
Comfort Systems USA, Inc. (NYSE:FIX)
Number of Hedge Fund Holders: 35
Talking about Comfort Systems USA, Inc. (NYSE:FIX), Cramer said:
“HVAC, whether it be Trane, whether it be Carrier, if you got HVAC, it’s the thing. I mean I know it’s weird because it’s very much like plastics in the movie The Graduate. But like if someone were to tell me right now, a young kid walked by and say, Jim, I’m thinking about going in the stock market. You know what I’d tell him? HVAC.”
Comfort Systems (NYSE:FIX) offers a wide range of mechanical and electrical services, including installation, maintenance, repair, and renovation of HVAC, plumbing, electrical, and other building systems. As of the first nine months of 2024, the company reported a 23% growth in same-store revenue compared to the same period in the previous year.
However, management acknowledged that the company may face more challenging revenue comparisons in the upcoming quarters, suggesting that growth in the fourth quarter of 2024 is likely to align closely with the growth experienced during the third quarter.
Looking further ahead, Comfort Systems (NYSE:FIX) expects continued revenue growth in 2025, forecasting a rise in the range of high single digits to low double digits. Moreover, CEO Brian Lane highlighted the company’s growing backlog and strong booking performance. He emphasized that despite the company completing projects at a record pace, its backlog remains significantly higher than in previous years.
Overall, FIX ranks 4th on our list of stocks that Jim Cramer recently highlighted. While we acknowledge the potential of FIX 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 time frame. If you are looking for an AI stock that is more promising than FIX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.