We recently published a list of 10 Small-Cap Stocks Jim Cramer is Talking About Amid Latest Market Rotation. Since Ensign Group Inc (NASDAQ:ENSG) ranks 9th on the list, it deserves a deeper look.
Recently, Jim Cramer talked about the rally in the small-cap-heavy Russell 2000 Index, saying these kinds of rebounds show you have to “stay invested” in the market to make “big money.”
“When I say stay in I mean you have to be as invested as you possibly can be so you don’t miss monster moves.”
Cramer said the Russell 2000 index rally was led by several “oddball” stocks that many people aren’t aware of.
“The biggest winners in the Russell today are all the companies I either don’t know or I barely heard of. You know I know thousands of stocks!”
Cramer highlighted that almost half of the stocks rising in the Russell 2000 index were biotech or healthcare companies that are losing money. Cramer believes these companies might be worth something only “years from now” and called them “risky” stocks.
Jim Cramer talked about what he called “small- and medium-sized businesses” which he believes can benefit from two possible developments in the near term: a Trump win in the election and rate cuts. A Donald Trump presidency, according to Cramer, could provide a level-playing field for these small companies which often get left behind by major companies amid tough regulation. Since Trump is expected to decrease regulations if he comes to power, these small companies could thrive in this new environment. Cramer said that money is coming from the “sidelines” as investors begin to invest in stocks instead of hoarding cash to earn interest income.
Cramer has been talking about several small-cap stocks in his programs lately. In a recent program, he mentioned several small-cap stocks that were moving recently and briefly discussed their businesses. We picked these stocks and analyzed their fundamentals and growth potential. We also mentioned hedge fund sentiment around these stocks. 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 home infusion nurse in full PPE gown delivering treatments to a patient in their own home.
Ensign Group Inc (NASDAQ:ENSG)
Number of Hedge Fund Investors: 20
Nursing and rehab services company Ensign Group Inc (NASDAQ:ENSG) is one of the top small-cap stocks Jim Cramer is talking about. Cramer said in a latest program that the stock sells for 25 times earnings.
“This one works, too.”
Ensign Group Inc (NASDAQ:ENSG) expects a 13% year-over-year revenue growth in 2024. The company also owns Standard Bearer Healthcare REIT, Inc., which is a captive real estate investment trust that invests in healthcare properties. The REIT has 115 owned properties which are subject to triple net long-term leases.
Ensign Group Inc (NASDAQ:ENSG) is expected to continue growing amid an aging population and demand for skilled nursing and rehab services. During Q2 earnings call the company talked about its expansion and growth in skilled nursing:
“As our operators continue to build on a solid foundation of strong clinical results, cultural excellence and sustainable real estate expenses, we are confident that our partners will continue to capitalize on the occupancy and skilled mix growth inherent in our portfolio, which will allow us to consistently achieve the results that we have delivered over time. Also, as you saw in our press release yesterday, we have been busy acquiring new operations, and our transitioning and recently acquired buckets now represent 27% of our total operational beds. Again, we want to emphasize that this represents massive organic growth potential within those existing growth buckets. To give some perspective, our occupancy and skilled mix days for the skilled nursing operations in the transitioning bucket were 75.7% and 21.7% respectively, while our same-store occupancy and skilled mix days were 80.8% and 31.5% respectively.”
Overall, Ensign Group Inc (NASDAQ:ENSG) ranks 9th on Insider Monkey’s list titled 10 Small-Cap Stocks Jim Cramer is Talking About Amid Latest Market Rotation. While we acknowledge the potential of Ensign Group Inc (NASDAQ:ENSG), 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 ENSG 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.