We recently published a list of Jim Cramer is Watching These 8 Stocks. In this article, we are going to take a look at where Getty Images Holdings, Inc. (NYSE:GETY) stands against other stocks that Jim Cramer is watching.
Jim Cramer, the host of Mad Money, recently highlighted a surge in merger activity, pointing out that we’ve seen a significant uptick in deals over the past few days. He explained that this wave of mergers and acquisitions aligns with what he’s been predicting, a shift in M&A activity due to the change in administration.
Cramer noted that under the Biden administration, the Federal Trade Commission (FTC) and the Justice Department’s antitrust division have been very strict on mergers, often taking an aggressive stance against any form of corporate consolidation. According to Cramer, companies had grown increasingly reluctant to pursue mergers under Biden’s regulatory approach, as they faced the uncertainty of lengthy court battles with little assurance of success.
“And that’s why when Trump won in November, it became very obvious that we were looking at a deluge of M&A deals and these companies couldn’t even bring themselves to wait for inauguration day.”
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“Alright, so what do we make of this wave of deals? First, I gotta say, it’s just nice to see some mergers again and while this deluge was widely anticipated because of the change in administrations, it’s still good to see some confirmation.”
Cramer said it made him more confident in predicting that M&A deals will continue to increase, which is one reason why he recently added Goldman Sachs stock to his Charitable Trust portfolio as it has a major M&A advisory business that had been relatively dormant under the previous administration. He urged investors to consider buying the stock, noting that it’s an excellent opportunity.
More generally, Cramer expressed satisfaction in seeing so many companies once again pursuing mergers that make sense for their businesses. When examining the deals announced in early January, Cramer pointed out that while some of these deals might have faced challenges under Biden’s administration, most appear justifiable.
“So the bottom line: Gotta tell you, I’m just glad we’re back to a place where reasonable arguments like this will be considered fairly by the antitrust regulators rather than the situation we had under Biden where every takeover is considered anti-competitive until proven otherwise.
That’s very good news for the whole market, as lots of stocks will be going away. Given that we have so few IPOs, there won’t be a lot of new stock to replace it and a supply shortage, well, that is always good news for investors.”
Our Methodology
For this article, we compiled a list of 8 stocks that were discussed by Jim Cramer during the episode of Mad Money on January 8. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the third quarter of 2024, 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).
A professional photographer capturing a visually intriguing lifestyle shot.
Getty Images Holdings, Inc. (NYSE:GETY)
Number of Hedge Fund Holders: 4
While discussing Getty Images Holdings, Inc. (NYSE:GETY) and Shutterstock, Inc. merger, Cramer quipped that the company is buying Shutterstock.
“Next, early yesterday morning, we learned that Getty Images in Shutterstock, two of the leading purveyors of stock photos and videos, are joining forces in a merger of equals. Of course, in reality, there’s no such thing. Getty’s buying Shutterstock and their shareholders will own 55% of the combined company. This one’s pretty straightforward. You got two major players in the same industry combining to give themselves a lot more leverage versus their customers. Something they need in this age of AI-generated content.”
Cramer mentioned that when reviewing the transactions from early January, while some might have faced opposition from Biden’s more ideologically driven regulators, the majority of them appear reasonable and well-founded.
“Getty Images and Shutterstock. Now they’re fighting for their life in a world where generative AI systems can create images from simple text prompts. They’ll certainly be stronger together and they’ll be in a better position to negotiate with the software developers who want to license their photos to train their AI models. By the way, they’re also gonna benefit from widespread adoption of the latest NVIDIA platform, Blackwell, which works wonderfully with video.”
Getty Images (NYSE:GETY) provides creative and editorial visual content through platforms, offering a range of products from stock photos and videos to music licensing and digital asset management services. On January 7, the company announced a merger agreement with Shutterstock, aiming to combine its strengths in a transaction that will create a premier visual content company.
The merger, which is expected to have an enterprise value of approximately $3.7 billion, will retain the name Getty Images Holdings, Inc., and continue to trade under the ticker symbol “GETY” on the New York Stock Exchange. The combined company will offer an expanded content library. The merger is expected to strengthen the financial profile of the new entity, enabling further product investment and innovation in an increasingly competitive market.
Craig Peters, Getty Images (NYSE:GETY) current CEO, will lead the new company, which is projected to generate nearly $2 billion in annual revenues. The transaction is expected to result in up to $200 million in cost savings within three years after its completion. Getty investors will hold about 54.7% of the combined company, while Shutterstock stockholders will own the remainder.
Overall, GETY ranks 3rd on our list of stocks that Jim Cramer is watching. While we acknowledge the potential of GETY 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 GETY 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.