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.
8. Chubb Limited (NYSE:CB)
Number of Hedge Fund Investors: 46
Jim Cramer commented on Chubb Limited (NYSE:CB), saying he has been conflicted because lower rates might impact Chubb’s profitability. Despite this, he believes Chubb Limited (NYSE:CB) is the best insurer and recommends it above others.
“Okay, so I like to play with an open hand. I have been very torn because I felt if rates were cut, maybe Chubb couldn’t make as much money, but they are by far the best, and I would not recommend any other insurer on the show other than Chubb.”
Chubb Limited (NYSE:CB) is an attractive investment due to its impressive financial performance, driven by disciplined underwriting and effective risk management. Chubb Limited (NYSE:CB) maintains one of the best-combined ratios in the industry, reflecting its ability to underwrite policies profitably. Its diverse revenue sources, including property and casualty insurance, reinsurance, and life insurance, provide a solid financial foundation. Strategic acquisitions, such as the integration of The Cigna Group (NYSE:CI)’s insurance operations in Asia-Pacific, have enhanced Chubb’s global reach and growth opportunities.
Additionally, Chubb Limited (NYSE:CB) is well-positioned to benefit from rising insurance premiums and growing demand for specialty insurance products, addressing new risks like cyber threats and climate change. Chubb Limited (NYSE:CB)’s conservative approach to underwriting and focus on cost management ensure consistent profitability and strong returns on equity. Furthermore, Chubb Limited (NYSE:CB) achieved a significant increase in net premiums written, which rose by 16.5% year-over-year in constant dollars, driven by substantial growth in both its commercial and consumer lines across international markets. In North America, Chubb Limited (NYSE:CB) saw an 8.7% growth in P&C lines, with notable performance in personal lines and major accounts.
7. International Business Machines Corp. (NYSE:IBM)
Number of Hedge Fund Investors: 54
Jim Cramer believes that International Business Machines Corp. (NYSE:IBM) is performing well, largely due to the strong leadership of Arvind Krishna. He suggests that holding onto International Business Machines Corp. (NYSE:IBM) stock or even buying more could be a good strategy.
“I think IBM is doing great. Arvind Krishna has done a remarkable job with IBM. I would hold on to it or consider buying more.”
International Business Machines Corp. (NYSE:IBM) is set for substantial growth thanks to its strategic shift towards hybrid cloud and AI. The 2019 acquisition of Red Hat significantly strengthened International Business Machines Corp. (NYSE:IBM)’s hybrid cloud platform, crucial as the global cloud market continues to expand. This acquisition enhances International Business Machines Corp. (NYSE:IBM)’s ability to manage and integrate workloads across various cloud environments. Moreover, International Business Machines Corp. (NYSE:IBM)’s AI capabilities, especially with its Watson platform, are well-positioned to meet the increasing demand for AI-driven insights and automation.
International Business Machines Corp. (NYSE:IBM)’s impressive performance in cloud and cognitive software, as shown by strong Q2 2023 earnings, highlights its successful move from traditional businesses to high-margin, modern technologies. International Business Machines Corp. (NYSE:IBM) also appeals to investors with its solid dividend yield and share buybacks, reflecting its commitment to returning capital while investing in growth.
Diamond Hill Capital Long-Short Fund stated the following regarding International Business Machines Corporation (NYSE:IBM) in its first quarter 2024 investor letter:
“Among our bottom Q1 contributors short positions in Dick’s Sporting Goods, International Business Machines Corporation (NYSE:IBM) and Palomar Holdings. Though we believe the quality and durability of IBM’s free cash flow-generating capabilities remain questionable, investor sentiment has improved amid optimism for the company’s still-nascent AI product suite.”
6. The TJX Companies Inc. (NYSE:TJX)
Number of Hedge Fund Investors: 56
Jim Cramer highlighted that The TJX Companies Inc. (NYSE:TJX)’s growth in same-store sales was driven by increased traffic rather than price changes, which is typical for the largest off-price retailer in the country. Although he does not personally know Herrman, Cramer believes in his expertise, noting that The TJX Companies Inc. (NYSE:TJX)’s stock rose 6% to an all-time high.
“TJX’s same-store sales growth came from traffic, not price, which is what you’d expect from the biggest off-price retailer in the country. I may not know Herrman personally, but I know he’s great at his job—just look at TJX stock, which jumped 6% to an all-time high today. I’m so glad we own it for the travel trust.”
The TJX Companies Inc. (NYSE:TJX) is a strong investment due to its effective off-price retail model, which consistently draws value-seeking consumers by offering high-quality, branded goods at significant discounts. This approach remains successful even in uncertain economic times, making The TJX Companies Inc. (NYSE:TJX) a popular choice for affordable merchandise. The TJX Companies Inc. (NYSE:TJX)’s solid financial performance is demonstrated by its 5% same-store sales growth in fiscal Q1 2024, driven by strong demand in its HomeGoods and Marmaxx segments.
The TJX Companies Inc. (NYSE:TJX) is also expanding globally, especially in Europe and North America, with a strategy of opening new stores to boost growth. Its efficient inventory management allows it to buy excess stock at lower prices and provide fresh merchandise, giving it a competitive advantage. With an attractive valuation compared to other retailers and a history of returning capital to shareholders through dividends and share buybacks, The TJX Companies Inc. (NYSE:TJX) offers a compelling investment opportunity with significant growth potential.
Madison Investors Fund stated the following regarding The TJX Companies, Inc. (NYSE:TJX) in its Q2 2024 investor letter:
“The TJX Companies, Inc. (NYSE:TJX), an off-price retailer, continues to do well. Its value-based retail stores are resonating with consumers given the backdrop of higher inflation, which led to strong revenue and profit growth in the most recent quarter.”
5. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Investors: 69
In his interview with Shar Ramaswami, the CEO of Snowflake Inc. (NYSE:SNOW), Jim Cramer pointed out that the company had a strong quarter with results that exceeded expectations. He highlighted a notable beat in the non-GAAP operating margin and a two-cent beat in non-GAAP earnings per share.
“Now, I have to point out that you actually had a very solid quarter—better than expected results, including a significant non-GAAP operating margin beat and a two-cent non-GAAP earnings per share beat.”
Snowflake Inc. (NYSE:SNOW) is a key player in cloud-based data warehousing and analytics, offering a platform that allows for seamless data storage and analysis across multiple clouds. This capability is vital in today’s data-driven world, where secure and scalable data sharing is increasingly important. Snowflake Inc. (NYSE:SNOW) is seeing strong growth, with a 36% increase in revenue year-over-year for Q2 FY2024 and a 24% rise in Remaining Performance Obligations, indicating high demand and a solid revenue outlook.
Snowflake Inc. (NYSE:SNOW)’s growing customer base, including many large enterprises and Fortune 500 companies, along with a 29% increase in customers spending over $1 million annually, highlights its strong market appeal and the value it provides.
Snowflake Inc. (NYSE:SNOW)’s net revenue retention rate of 142% shows its success in retaining customers and increasing its spending. Strategic partnerships with major cloud providers such as AWS, Microsoft Azure, and Google Cloud broaden Snowflake’s market reach and integration. Ongoing innovations like the data marketplace, Snowpark, and new applications further boost its platform’s attractiveness.
4. HCA Healthcare Inc. (NYSE:HCA)
Number of Hedge Fund Investors: 69
Jim Cramer noted that HCA Healthcare Inc. (NYSE:HCA) is currently the fifth-best-performing healthcare stock in the S&P 500 and is considered the gold standard among hospital chains. He explained that HCA Healthcare Inc. (NYSE:HCA) stands out as the best-managed hospital chain with a strong presence in key regions and generates substantial free cash flow.
“HCA is now the fifth best-performing healthcare stock in the S&P 500. The hospital chain is the gold standard of its kind. The basic bull case for HCA? Let me lay it out for you: this company is the best-run hospital chain with exposure to the strongest areas of the country, and it generates a ton of free cash flow. We know this is a great moment for hospitals, so why not just own the best hospital chain? And yes, HCA is the best.”
HCA Healthcare Inc. (NYSE:HCA) is a strong investment choice due to its solid financial performance and strategic growth efforts. In Q2 2024, HCA Healthcare Inc. (NYSE:HCA) achieved a 7.1% revenue increase, reaching $16.9 billion, with an impressive operating margin of 18.7%. This financial stability allows HCA Healthcare Inc. (NYSE:HCA) to invest in expanding its network and to return capital to shareholders through dividends and share buybacks.
As one of the largest U.S. healthcare providers, HCA Healthcare Inc. (NYSE:HCA) is actively growing through acquisitions and investing in high-demand areas like ambulatory surgery centers and urgent care facilities. This growth aligns with favorable industry trends, such as an aging population and rising healthcare needs. HCA Healthcare Inc. (NYSE:HCA)’s strong cash flow, which exceeded $7.5 billion in 2023, supports its growth initiatives and ability to return value to shareholders while managing debt.
Moreover, HCA Healthcare Inc. (NYSE:HCA) has proven resilient during economic downturns, including the COVID-19 pandemic, maintaining stable revenue and profitability. These strengths make HCA Healthcare Inc. (NYSE:HCA) a promising investment with substantial growth potential and stability.
Baron Health Care Fund stated the following regarding HCA Healthcare, Inc. (NYSE:HCA) in its Q2 2024 investor letter:
“On the health care provider side, volumes remain healthy and labor costs have moderated. We continue to like HCA Healthcare, Inc. (NYSE:HCA), the best-in-class hospital operator with an attractive set of increasingly diversified assets in strong urban markets, where it is typically the #1 or #2 provider. Its strong operating cash flow and under-levered balance sheet provide flexibility to make growth investments and return capital to shareholders.”
3. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Investors: 71
Jim Cramer highlighted Costco Wholesale Corporation (NASDAQ:COST) as a unique retailer, ranking as the second-largest pure-play retailer in the country. He explained that Costco Wholesale Corporation (NASDAQ:COST) operates as a massive buying group for its members, offering exceptional prices, sometimes lower than what the store itself pays.
“Costco is like no other. It’s the second-biggest pure-play retailer in the country, and it functions basically as a gigantic buying group for its members who order pretty much everything. The membership gets you amazing prices, including some that are likely below what the store itself pays, like the bottles of wine I mentioned the other day and the gold bullion everyone is so crazy about.
Costco is a one-of-a-kind retailer where you might not find everything, but what you do find is likely cheaper than anywhere else. This store has done the most to roll back prices in this nation, often through its premium house brand, Kirkland Signature. Costco isn’t afraid to go after any nationally branded product if it won’t lower prices, and under the Kirkland label, they get prices down because the Kirkland brand is better than most of the branded stuff.”
Costco Wholesale Corporation (NASDAQ:COST) represents a strong investment opportunity due to its impressive financial performance and strategic advantages. Costco Wholesale Corporation (NASDAQ:COST) posted Q4 2024 earnings per share of $5.09, which aligned with market expectations. Despite challenges in the retail environment, Costco Wholesale Corporation (NASDAQ:COST) continued to demonstrate strong sales growth, particularly in its membership fees and net sales, which were key drivers of revenue. Costco Wholesale Corporation (NASDAQ:COST) also declared a quarterly dividend of $1.16 per share, reflecting its ongoing commitment to returning value to shareholders.
Costco Wholesale Corporation (NASDAQ:COST)’s membership model is a key asset, generating $4.3 billion in pure profit from membership fees in FY 2023, with a high renewal rate of around 90% reflecting strong customer loyalty. Costco Wholesale Corporation (NASDAQ:COST)’s expansion plans, including opening about 30 new warehouses annually and focusing on international markets like China, present significant growth opportunities.
Additionally, Costco Wholesale Corporation (NASDAQ:COST) has shown resilience during economic downturns, such as the COVID-19 pandemic, and its e-commerce business has grown by 9.7% in FY 2023. These factors together highlight Costco’s potential for continued revenue growth and leadership in the retail market.
ClearBridge Sustainability Leaders Strategy stated the following regarding Costco Wholesale Corporation (NASDAQ:COST) in its Q2 2024 investor letter:
“Consumer staples holdings were also standouts in the quarter, such as Costco Wholesale Corporation (NASDAQ:COST), which continues to execute well and delivered better than expected earnings, helped by strong traffic driving better expense leverage. Customers also looked to be shifting toward more discretionary purchases.”
2. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Investors: 95
Jim Cramer discussed Walmart Inc. (NYSE:WMT) under Doug McMillon, noting that while McMillon often avoids detailed comments on quarterly performance, Walmart’s strategy of lowering prices on 7,200 items is getting attention. Cramer emphasized that Walmart Inc. (NYSE:WMT) now offers remarkably low prices, with some items reduced to levels from 2020 or 2019.
“Finally, let’s discuss Walmart under Doug McMillon. McMillon doesn’t like to talk much about the details of the quarter, but one thing is clear: by rolling back prices on 7,200 items, Walmart is making sure people notice. Shoppers go to Walmart and find incredibly low prices, some even rolled back to 2020 or 2019 levels. Walmart, once a drag to shop through, is now dazzling. Before you dismiss it, I urge you to take a look—don’t be a snob. You might be surprised by how great Walmart is.”
Walmart Inc. (NYSE:WMT) is a strong investment due to its vast global presence and strategic strengths. As the world’s largest retailer with over 10,500 stores in 24 countries, Walmart Inc. (NYSE:WMT) uses its size to negotiate favorable deals with suppliers, allowing it to offer low prices while maintaining healthy profit margins. Walmart Inc. (NYSE:WMT)’s extensive distribution network and efficient supply chain further enhance its ability to serve a large customer base effectively. In fiscal year 2023, Walmart Inc. (NYSE:WMT) reported revenue of $611.3 billion, marking a 6.7% increase from the previous year.
This solid financial performance supports its ability to invest in growth, pay dividends, and repurchase shares, making it appealing to investors. Walmart Inc. (NYSE:WMT)’s e-commerce sales grew by 17% in FY 2023, thanks to improvements in its online platforms and services like Walmart+. Walmart Inc. (NYSE:WMT)’s business model also proves resilient during economic downturns, such as the COVID-19 pandemic, when strong sales of essentials drove growth.
Walmart Inc. (NYSE:WMT)’s strategic moves into healthcare, financial services, and new technologies enhance its long-term growth potential. Additionally, its commitment to sustainability and social responsibility, with goals for zero emissions and waste reduction by 2040, boosts its brand appeal to socially conscious investors.
1. Advanced Micro Devices Inc. (NASDAQ:AMD)
Number of Hedge Fund Investors: 108
Jim Cramer recommended buying more Advanced Micro Devices Inc. (NASDAQ:AMD), noting its steady upward trend this week. He praised Lisa Su for a successful acquisition and highlighted Advanced Micro Devices Inc. (NASDAQ:AMD)’s excellent products, particularly for accelerated computing and AI.
“I think you can buy more. AMD has been on a steady upward trend this week, and Lisa Su made a great acquisition. Her products, especially for accelerated computing, are terrific. Yes, for AI and generative AI, they are outstanding. Buy more AMD, just as we’ve been doing for the club.”
Advanced Micro Devices Inc. (NASDAQ:AMD) is a strong investment due to its leading role in high-performance computing and graphics. Advanced Micro Devices Inc. (NASDAQ:AMD)’s Ryzen processors, EPYC server chips, and Radeon GPUs have successfully competed against Intel Corporation (NASDAQ:INTC) and NVIDIA Corporation (NASDAQ:NVDA). Advanced Micro Devices Inc. (NASDAQ:AMD)’s advancements in its Zen architecture and use of 5nm process technology boost its performance and efficiency, positioning it for ongoing success.
Advanced Micro Devices Inc. (NASDAQ:AMD) has been steadily gaining market share in both CPUs and GPUs, with its products being popular among consumers, enterprises, and cloud providers. In fiscal year 2023, Advanced Micro Devices Inc. (NASDAQ:AMD) achieved $23.6 billion in revenue, a 21% increase from the previous year, driven by improved gross margins and strong cash flow.
Advanced Micro Devices Inc. (NASDAQ:AMD) is well-positioned to benefit from the rising demand for data center and AI solutions, especially with its EPYC processors and the recent acquisition of Xilinx, which adds field-programmable gate arrays (FPGAs) and adaptive computing to its portfolio. Strategic partnerships with major tech firms and their resilience against competitors further enhance Advanced Micro Devices Inc. (NASDAQ:AMD)’s growth prospects.
While we acknowledge the potential of Advanced Micro Devices Inc. (NASDAQ:AMD), our conviction lies in the belief that under the radar 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 NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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