In this article, we’ll explore the 10 Stocks Jim Cramer is Talking About.
On a recent episode of Mad Money, Jim Cramer suggests that perhaps we are misjudging the retail sector. He argues that the debate over whether consumers are sick, well, frugal, or stressed might be misguided. According to Cramer, consumer behavior doesn’t shift dramatically overnight; people don’t suddenly change from being sick to well within a single quarter. As we look ahead to the Fed’s discussion at Jackson Hole on Friday, with the market averages rising by 56 points and the S&P 500 increasing by 42%, it’s clear we need to reassess our views on the consumer’s state.
“Maybe we’re looking at retail all wrong. Perhaps this whole discussion about whether the consumer is sick, well, frugal, or stressed is just a big pile of manure. The consumer doesn’t change their behavior overnight; they don’t get sick and then recover within a single quarter. As we consider what the Fed will discuss on Friday at Jackson Hole, with the averages inching up 56 points and the S&P 500 advancing 42%, we need to rethink the great debate about the state of the consumer.”
Jim Cramer points out that understanding consumer behavior is crucial for predicting when the Fed might cut interest rates. He explains that the Fed needs to lower rates before the economy worsens to the point of needing urgent intervention. However, the Fed can’t act if the economy is performing well.
“This debate is central to what the market needs to see for rate cuts. We first need to understand that the Fed has to start cutting interest rates before the economy deteriorates to a point where they need to scramble to fix things. However, they can’t act if the economy is doing fine. The aggregate retail sales data is inconclusive, so we often try to extrapolate from individual retailers. Taken together, these retailers seem to suggest that the consumer is fickle and perhaps tapped out.”
Jim Cramer argues that the current debate about consumer behavior might be misguided. He believes that consumers are not as fickle as some suggest. Instead, they are shopping at stores led by successful retail CEOs like Ron Vachris, Doug McMillon, Ernie Herman, and Brian Cornell.
“Tonight, I’m arguing that the consumer is not fickle at all. People are shopping, and they’re shopping at places where great retail CEOs are making a difference, like Ron Vachris at Costco, Doug McMillon at Walmart, Ernie Herman at TJX, and Brian Cornell at Target. These are the places people are choosing to shop. The consumer isn’t frugal or tight-fisted; they’re simply shopping where they prefer, and these outstanding merchants are drawing them in.”
Our Methodology
In this article, we reviewed a recent episode of Jim Cramer’s Mad Money where he discussed ten different stocks. We also examined the opinions of hedge funds on these stocks and ranked them according to how many hedge funds own them, from the least to the most.
At Insider Monkey we are obsessed with 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).
Here’s What Jim Cramer is Saying About These 10 Stocks
10. Lumen Technologies Inc. (NYSE:LUMN)
Number of Hedge Fund Investors: 18
Jim Cramer noted that the move in Lumen Technologies Inc. (NYSE:LUMN) has been dramatic and steep. He mentioned that investing in network security and cloud solutions would have been ideal. While some saw this opportunity, he missed it and considered the trade to be over.
“This is a parabolic move. It would have been great to be invested in something like network security and cloud solutions. For some, it was easy to see, but I missed it. The trade is done.”
Lumen Technologies Inc. (NYSE:LUMN) is well-positioned for significant growth due to its strategic partnerships with major companies like Microsoft Corporation (NASDAQ:MSFT) and Corning Incorporated (NYSE:GLW). By supplying network infrastructure and fiber optic cables to support Microsoft’s Azure Cloud expansion, Lumen Technologies Inc. (NYSE:LUMN) taps into the increasing demand for AI-driven technology. Additionally, the deal with Corning gives Lumen Technologies Inc. (NYSE:LUMN) access to a large share of global fiber capacity, enhancing its supply chain in a competitive market. These developments have recently led to a 7% increase in Lumen Technologies Inc. (NYSE:LUMN)’s stock, indicating renewed investor confidence.
Although Lumen Technologies Inc. (NYSE:LUMN) still faces financial challenges and high debt levels, the positive market response suggests that the successful execution of these partnerships could lead to a meaningful turnaround. If Lumen Technologies Inc. (NYSE:LUMN) manages to capitalize on these opportunities, it could see substantial revenue and profit growth, making Lumen an appealing investment despite its risks.
Longleaf Partners Fund stated the following regarding Lumen Technologies, Inc. (NYSE:LUMN) in its fourth quarter 2023 investor letter:
“Lumen Technologies, Inc. (NYSE:LUMN) – Global fiber company Lumen was the top detractor for the year, and we sold our position in the first half, when it became clearer the new management team under CEO Kate Johnson would not pursue a strategic path to monetizing Lumen’s consumer business. Lumen represented a permanent capital loss for the Fund, a significant opportunity cost for the portfolio and a disappointing long-term mistake. Lumen has reinforced the importance of limiting overweight positions in the portfolio, being cautious of leverage and value declines, and fully re-underwriting a case – and being willing to move on – when the people and/or underlying facts change.”
9. ZIM Integrated Shipping Services Ltd. (NYSE:ZIM)
Number of Hedge Fund Investors: 26
Jim Cramer expressed confidence that it is still ZIM Integrated Shipping Services Ltd. (NYSE:ZIM)’s time to shine. He has been consistent with this belief and mentioned that he and Ben Stiller frequently share this view. Cramer recommends continuing to hold on to ZIM Integrated Shipping Services Ltd. (NYSE:ZIM).
“I think it’s still ZIM’s time. I’ve been saying this for a while. Ben Stiller and I often look at each other and think it’s ZIM’s time. So, I say hold on to ZIM.”
ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) is well-positioned to benefit from strong global trade and container shipping demand. ZIM Integrated Shipping Services Ltd. (NYSE:ZIM)’s asset-light model, which involves leasing rather than owning vessels, allows it to adjust capacity quickly in response to market changes, potentially boosting profits during high-demand periods. ZIM Integrated Shipping Services Ltd. (NYSE:ZIM)’s robust balance sheet and substantial cash reserves reflect its strong financial management and its high dividend yield is attractive to investors seeking income, demonstrating confidence in its cash flow and future prospects.
By focusing on niche markets and high-margin trade routes, ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) avoids the crowded, low-margin segments dominated by larger competitors, maintaining strong pricing power and profitability. Moreover, ZIM Integrated Shipping Services Ltd. (NYSE:ZIM)’s investments in digitalization and innovative technologies enhance its operational efficiency and position the company to take advantage of emerging trends, such as the increased demand for eco-friendly shipping solutions. Overall, these factors make ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) a promising investment with significant growth and profit potential.
