We recently published an article titled Jim Cramer Discussed 10 Stocks That Can Do Well in December.In this article, we are going to take a look at where Axon Enterprise, Inc. (NASDAQ:AXON) stands against the other stocks that can do well in December according to Jim Cramer.
Jim Cramer, the host of Mad Money, recently shared a list of ten stocks he believes will perform well in December. He pointed out that stocks that do well in November tend to continue their strong performance into the final month of the year.
Cramer explained that the beginning of a new month brings attention to the previous month’s performance, and with that, a significant influx of money flows into the market. This money, he said, tends to validate the moves of the largest stocks, creating a cycle where money is immediately put to work, often benefiting the Magnificent Seven.
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Cramer also highlighted a common pattern at the end of the year, noting that people tend to make contributions to their retirement accounts when the year is going well. He emphasized that this trend is already visible in the market. When asked why a strong November often translates into a positive December, Cramer pointed to the mechanics of money management. He said that this pattern isn’t new for him, elaborating:
“Before I started my Charitable Trust more than two decades ago, I ran a hedge fund. I was always looking for an edge, and one of the most reliable patterns I found is that, when December rolls around, you mimic the biggest winners of November.”
Cramer recalled how, during his hedge fund days, he would focus on the top-performing stocks of November, buying heavily into those picks and letting them continue to perform through the end of the year. He remarked that this approach has proven to be successful year after year.
In addition to the stocks he recommended, Cramer also noted a category of stocks tied to travel. He mentioned that travel-related industries, including airlines and cruise ships, were particularly strong in November and could continue to show promise in December.
“Now, there are other[s] underneath this list, ones that involve traveling. To me, that means you could buy anything connected to travel, including the airlines… Cruise ships work… But the bottom line: If you want to know what I think could do best in the month of December, or simply what worked best in the month of November, so now you got your marching orders and I say (buy, buy, buy).”
Our Methodology
For this article, we compiled a list of 10 stocks that were discussed by Jim Cramer during a recent episode of Mad Money on December 2. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, 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 technician in a white coat testing an in-car system on a modern military vehicle.
Axon Enterprise, Inc. (NASDAQ:AXON)
Number of Hedge Fund Holders: 46
Cramer called Axon Enterprise, Inc. (NASDAQ:AXON) a “definitive Trump stock” because of the notion that law enforcement will benefit from the new administration’s support.
“Second is Axon… that’s the company formerly known as TASER a long time ago. I don’t call it that because it obscures all the unbelievable work they’re doing to rationalize police stations, make things easier for law enforcement and the justice system. Axon had three things happen in November. They reported a much better-than-expected quarter, I mean much. They rolled out a new edition of their software, including valuable AI that saves a huge amount of time and of course, money. And this is a definitive Trump stock because there’s a widespread belief that local law enforcement will get more money from Washington with the GOP trifecta.”
Axon (NASDAQ:AXON) develops and sells conducted energy devices under the TASER brand and provides hardware and cloud-based software solutions to help law enforcement capture, store, manage, and analyze video and digital evidence. It delivered solid results for the third quarter, with quarterly revenue reaching $544 million, a 32% increase compared to the previous year, surpassing expectations.
This growth was fueled by strong performance across all product segments. The demand for its latest TASER and body camera products remained robust, contributing to growth in both TASER and Sensors & Other revenue. The company reported net income of $67 million, or $0.86 per diluted share, resulting in a net income margin of 12.3%. Additionally, adjusted EBITDA came in at $145 million, a 54% year-over-year increase, representing a margin of 26.7%, driven by higher revenue and improved operating efficiency.
Rick Smith, Founder and CEO, highlighted the potential for legislation addressing drone-related challenges, prompting the company to shift focus toward drone technology. Axon (NASDAQ:AXON) made significant progress in expanding its capabilities by acquiring Dedrone in Q3. Dedrone is recognized as the global leader in airspace awareness and security, and its smart airspace security technology integrates with the company’s public safety platform. This acquisition allows Axon to advance drone-based public safety programs, such as Drone as First Responder (DFR), to protect against unauthorized drone activity.
Overall AXON ranks 6th on our list of the stocks that will do well in December according to Jim Cramer. While we acknowledge the potential of AXON 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 timeframe. If you are looking for an AI stock that is more promising than AXON 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.