We recently published an article titled, Jim Cramer on Netflix and Other Stocks. In this article, we are going to take a look at where RTX Corporation (NYSE:RTX) stands against other stocks discussed by Jim Cramer.
Recently, Mad Money’s host, Jim Cramer addressed what he called a “ridiculous plethora of sell-side downgrades,” noting that the Dow Jones Industrial Average fell by 0.94%, the S&P 500 decreased by 0.96%, and the Nasdaq Composite dropped by 1.18% on Monday. While he acknowledged the session’s poor performance, he cautioned that paying too much attention to downgrades can be detrimental for long-term investors.
Cramer urged investors not to get overly influenced by the negative sentiment on Wall Street and emphasized the importance of staying committed to strong companies, even when their stock prices experience volatility. He recounted the history of the bull market, stating:
“When I look at the history of this incredible bull market, and it has been an incredible bull market, it’s littered with buy-to-hold, hold-to-sell, buy-to-hold, hold-to-sell. These downgrades scare you out of amazing stocks at levels that may temporarily be too high, but will recover later. If you listen to the downgrades, though, you’ll never recover with it.”
In discussing the challenges investors face, Cramer pointed out that many get rattled by analyst downgrades and might sell their shares in solid companies, which can make it difficult to buy back in later.
“In the last decade, the toughest thing to do is to hold on to good stocks. But analysts and commentators love to take aim at big long-term winners. Their jeremiads have scared so many people out of some amazing gains.”
He observed that complacency can be prevalent on Wall Street, with bullish investors often overlooking risks while bearish ones miss out on potential opportunities. For those considering action based on a downgrade, Cramer advised waiting for a bounce to sell, but he noted that timing such moves is “incredibly hard,” even for seasoned traders.
Cramer emphasized that when analysts downgrade stocks that have already taken a hit and overlook positive aspects, it can create a challenging environment. However, he believes it is still possible to profit. Here’s what he said:
“I need you to understand that when analysts downgrade after stocks have already been hammered, when really good investors ignore the positives, then, it may be a grim time. But not so grim that we can’t make money by focusing on the fundamentals of the companies. And not just the economy, the Fed, interest rates and oil.”
Cramer Thinks RTX Corporation (NYSE:RTX) Is A ‘Winner’
Our Methodology
For this article, we compiled a list of 15 stocks that were mentioned by Jim Cramer during his episodes of Mad Money on October 7 and October 8. 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).
RTX Corporation (NYSE:RTX)
Number of Hedge Fund Holders: 54
RTX Corporation (NYSE:RTX) is an aerospace and defense company. It offers a variety of systems and services tailored to meet the needs of commercial, military, and government clients both in the United States and globally. The company offers its services and products through three businesses, Collins Aerospace, Pratt & Whitney, and Raytheon. Cramer called the stock a winner and said to hold on to it, highlighting that it is not expensive.
“It only sells at 22 times earnings. It did hit an all-time high today, but you know what, it’s not expensive. It’s got a 2% yield. Here’s what I would do… You can try to cut the position back a little if it’s too big for you, but otherwise, you hold on. It’s a winner and nothing there shows me that it won’t continue to be so.”
Recently, RTX (NYSE:RTX) announced a quarterly dividend of $0.63 per share, payable by December 12 to shareowners of record on November 15. The company has consistently paid cash dividends on its common stock since 1936, highlighting a long-standing tradition of shareholder return.
During the second quarter, RTX (NYSE:RTX) showed substantial operational achievements, including a 10% increase in organic sales. The company also experienced adjusted margin growth across all three segments, complemented by an impressive $2.2 billion of free cash flow. Management highlighted its substantial backlog totaling $206 billion and commented that there is an unprecedented demand for its offerings. The company is concentrating on fulfilling customer commitments, driven by its CORE operating system, which facilitates efficient execution and management of operations.
Overall, RTX ranks 11th on our list of stocks discussed by Jim Cramer. While we acknowledge the potential of RTX 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 RTX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Read Next: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.