We recently published a list of Jim Cramer Discussed These 18 Stocks As Inflation Dropped. In this article, we are going to take a look at where Builders FirstSource, Inc. (NYSE:BLDR) stands against other stocks that Jim Cramer discussed as inflation drops.
In a fresh appearance on CNBC’s Squawk on the Street, Jim Cramer started the show by commenting on the latest Consumer Price Index (CPI) data release. The CPI is an inflation measurement, and the data for December saw prices rise by 0.4% monthly and 2.9% yearly. The monthly figure was above economist expectations of 0.3% while the annual figure was in-line. Naturally, this would suggest positive market movement but the investor reaction was muted. Commenting on the reaction, Cramer shared: “Look what can I say. People told me that, again and again, if it just came in in-line that would be bad. That turned out to be a great mis-judgement. An in-line number in an atmosphere where we felt that things are going to, that everything’s going to go explode to the top and we’re going to be seeing five percent on the ten-year and six percent on the thirty, all these crazy things. All of the table, at least for today.”
Cramer added that market sentiment is at opposite ends when it comes to interest rates and earnings. This is because Investors don’t expect the Fed to cut interest rates by much this year. According to him, “When I look at this market. . . there was a tremendous amount of negativity about interest rates but positivity about earnings. If you take the negativity about interest rates off, you look at the earnings that we saw this morning, people are going to be pretty optimistic. And it might be sustainable throughout, I don’t know, a little while. These are great numbers that we saw this morning.”
The day had started with big banks releasing a set of earnings release that sent their stocks soaring. However, Cramer’s co-host, David Faber, cautioned that when he previously appreciated positive bank earnings, the stocks ended up dipping in the aftermath. Cramer responded by agreeing with Faber’s assessment and adding “I think the difference might be that the tone of the comments at least from what I’ve talked to the, from the CEOs, on the calls, will be a little more positive. For something that we, I think we all struggle to try to get a handle on which is this notion of animal spirits. [The] Notion of optimism.”
He linked some of the optimism with the perception of the incoming administration being more friendly towards banks when it came to regulation. “You know, Carl, when you see CEOs, you try to figure out what’s happening in the country since the election. And you hear people say listen it’s a peaceful transition, you hear people say it’s a much better environment for deals,” Cramer commented. He added “But I come back and just say, what’s really going on is a belief that it, when it comes to the banks, that there was some sort of tyrannical regime. . . If they are gone, then maybe there is a runway for more than just one quarter’s growth.”
The change in government makes Cramer cautiously optimistic about the banking industry. According to him “You don’t want to be too optimistic, ever, because the bank stocks have let us down by say ten thirty, eleven in the morning. But so far it’s a different attitude is what I’m speaking to.”
Since he was spending another day at the JPMorgan Healthcare Conference, when asked about some of his biggest takeaways from the event, Cramer responded:
“I would not want to be in the processed food business. I think that this is about, let’s get diet and exercise. If that doesn’t work, then let’s go vaccine. And let’s go inoculation. Diet and exercise being front and center to wean off what the packaged food people have done to our country. That’s his [RFK Jr.] view. That’s not necessarily my view. I think that these companies do, they do things that I didn’t want my kids to be addicted to Cheerios. Well actually Froot Loops. But I think what’s really going on David is it’s the regime of what we can do for ourselves versus what happens if you can’t kick obesity. What happens if you can’t kick diabetes.”
Our Methodology
To make our list of the stocks that Jim Cramer talked about, we listed down all the stocks he mentioned during CNBC’s Squawk on the Street aired recently.
For these stocks, we also mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds invest in? 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 crane lifting a truss during the construction of a new building.
Builders FirstSource, Inc. (NYSE:BLDR)
Number of Hedge Fund Holders In Q3 2024: 55
Builders FirstSource, Inc. (NYSE:BLDR) is a mega building products and equipment company. The firm provides products such as wall panels, stairs, and windows that are used for building houses. As has been the case with other stocks, Builders FirstSource, Inc. (NYSE:BLDR)’s shares struggled in 2024 and closed the year 13% lower. The poor share price performance came on the back of higher interest rates depressing the construction industry. However, a recent offer by QXO to buy Beacon Roofing can mean these stocks are undervalued, according to Cramer. Here’s what he said:
“What does it [QXO’s $11 billion acquisition proposal of Beacon Roofing] say about the companies like Floor & Decor, Builder’s First.
“These companies may be undervalued, they’re selling at very low multiples.”
Overall, BLDR ranks 13th on our list of stocks that Jim Cramer discussed as inflation drops. While we acknowledge the potential of BLDR as an investment, our conviction lies in the belief that some 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 BLDR 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.