Jim Cramer, the host of Mad Money, recently discussed this week’s events on Wall Street, which included President-elect Donald Trump’s inauguration and several companies’ earnings reports. Cramer touched on the broader theme of business operations, reflecting on how companies generally want the freedom to operate with minimal interference and lower taxes. He posed the question of whether that’s unreasonable, noting that it really depends on one’s perspective.
“Very unreasonable if you think big business is inherently nefarious and all these companies are run by greedy oligarchs, but if you believe in free market capitalism, letting businesses do what they want within certain limits, well that is the name of the game.”
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When discussing Trump’s inauguration, Cramer highlighted that Trump seems intent on rolling back many of the regulations put in place by the Biden administration, including closing borders and taking aggressive steps against undocumented immigration. While acknowledging that not all of Trump’s plans might be realized, Cramer remarked that some of his policy changes could be enacted quickly, while others might never reach the Supreme Court. Regardless, he noted that it appears Trump is preparing for a strong push to support business interests.
“That’s the only thing that can justify this market’s recent rally. Now, my interactions with soon-to-be President Trump tended to revolve around the stock market, which he thinks of as the true barometer of his job performance. It’s funny because Biden never cared about the stock market even though stocks did great during his administration.”
According to Cramer, Biden approached his presidency with a focus on labor and class, whereas Trump has made it clear that he intends to prioritize business and capital. He expressed little expectation that this would change in Trump’s second term, suggesting that there will be plenty of executive orders to analyze moving forward.
“Here’s the bottom line: As you wrap up the Biden administration, even though I’ve been very critical of his approach to the business, stocks have done well. The Dow is up 41%, the S&P is up 58%, and the Nasdaq recorded 49%. Any other president would be proud of that track record. The fact that Biden seems to not be, maybe it says pretty much everything.”
Jim Cramer Discussed 9 Stocks for This Week’s Game Plan
Our Methodology
For this article, we compiled a list of 9 stocks that were discussed by Jim Cramer during the episode of Mad Money on January 17. 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).
Jim Cramer Discussed 9 Stocks for This Week’s Game Plan
9. American Express Company (NYSE:AXP)
Number of Hedge Fund Holders: 62
Talking about American Express Company (NYSE:AXP), a financial services provider, Cramer remarked:
“Also, on Friday, we hear from American Express. It seems like every time Amex reports it gets hit on that day. And what do I do? I come on here and tell you to buy it. After its juggernaut run these last few years, you’d think that when CEO Stephen Squeri talks, people would want to wanna buy not sell. I say, so what? We’ll catch it when the fools say goodbye.”
Over the past 5 years, the company’s stock shot up over 134%. While commenting on his favorite American Express (NYSE:AXP) in October 2024 before the company reported its Q3 2024 earnings, Cramer said:
“The last two times it got hit, I told you to buy it. That was right. Maybe the third time’s the charm, and it won’t even go down. The Amex conference call is a great affair because the company gives you so much information about who’s spending, what people are doing. Gen X, Gen Z, they got it all. If you monitor this one, if it gets hit, I’m going to tell you, it’ll probably be a buy. It’s been right and I’m not going to change my view.”
8. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Holders: 57
Cramer called Verizon Communications Inc. (NYSE:VZ) a “chronic underperformer” and declared his lack of faith in the company.
“Finally, on Friday, chronic underperformer, Verizon gets a chance to chronically underperform again. Now, I know a lot of traders think that this 7% yield can act like a trampoline… I don’t have much faith in Verizon. How about that?”
Verizon (NYSE:VZ) offers a range of communications, technology, and entertainment services to consumers, businesses, and government entities worldwide. It provides wireless, broadband, and wireline services.
For 2024, Verizon (NYSE:VZ) expects wireless service revenue growth of 2.0% to 3.5% and adjusted EBITDA growth between 1.0% and 3.0%. The company forecasts adjusted earnings per share between $4.50 and $4.70, capital expenditures ranging from $17.0 billion to $17.5 billion, and an adjusted effective income tax rate of 22.5% to 24.0%.
7. GE Aerospace (NYSE:GE)
Number of Hedge Fund Holders: 95
GE Aerospace (NYSE:GE) specializes in designing and manufacturing engines for both commercial and military aircraft, as well as providing integrated engine components, electric power systems, and mechanical systems for aviation. During the episode of Mad Money, Cramer remarked:
“Thursday, we have another GE coming in, GE Aerospace this time, and I gotta tell you something, I think we have a winner, but it’s not as clean as I’d like because last time there were… supply chain issues causing an 8% hit to the stock. Now if they get it right this time, I think that you’ll recoup that loss in the same day.”
In 2024, following GE Aerospace’s (NYSE:GE) report of $1.15 per share in earnings and $8.9 billion in revenue for the third quarter, Cramer explained that there were signs of weakness in certain orders and persistent supply chain challenges in aircraft engine production. He mentioned that while this wouldn’t have been a major concern, the stock had already risen significantly for 2024, prompting investors to sell first and seek clarification later. Cramer said:
“They don’t think, hey, wait a second, GE has years of demand ahead and aerospace is a great secular growth market. No, that takes wisdom, genuine wisdom. And who the heck has time for wisdom when you can just ring the register? And that’s how a fantastic stock like GE Aerospace closes down 9% and no more than that.”
6. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 81
Johnson & Johnson (NYSE:JNJ) is a full-service healthcare company involved in the research, development, production, and sale of a wide variety of healthcare products. The company will announce its fourth-quarter results this week and Cramer remarked:
“Wednesday we got some real firecrackers… We also get results from two household names, Procter & Gamble and Johnson & Johnson. I think Procter might struggle with the strong dollar in China while J&J still has to deal with talc asbestos lawsuits and the recent acquisition of Intra-Cellular for $14 billion, which could threaten its pristine credit rating. The market has turned against these kinds of stocks viciously. Too slow growing. I think you can put either way though and make good money just by reinvesting their juicy dividends.
Doesn’t help that all pharma’s are under the microscope as President Biden rushed out a series of drugs that Medicare will try to get better prices for. This is the one part of the Inflation Reduction Act that actually reduces inflation at the expense of the drug companies. One of the most popular medicines for instance of the year Wegovy, that’s the weight loss drug from Novo Nordisk will get a ton of scrutiny as the White House put it on the list.”
Cramer also mentioned that Eli Lilly has a comparable drug, and now people are concerned that the same issues could arise when it faces regulatory review, causing the stock to drop once again. He acknowledged that the decline wasn’t surprising, but it still hurt, especially with so many other stocks seeing strong gains.
5. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 68
Talking about a major player in the consumer packaged goods industry, The Procter & Gamble Company (NYSE:PG), Cramer said:
“Wednesday we got some real firecrackers… We also get results from two household names, Procter & Gamble and Johnson & Johnson. I think Procter might struggle with the strong dollar in China while J&J still has to deal with talc asbestos lawsuits and the recent acquisition of Intra-Cellular for $14 billion, which could threaten its pristine credit rating. The market has turned against these kinds of stocks viciously. Too slow growing. I think you can put either way though and make good money just by reinvesting their juicy dividends.”
Cramer also recently discussed the reasons behind Procter & Gamble’s (NYSE:PG) recent stock decline, acknowledging that it’s a great company but noting some important factors contributing to its struggles. One major factor, according to Cramer, is the impact of rising long-term interest rates, which have been climbing ever since the Federal Reserve began cutting short-term rates.
Cramer explained that when interest rates spike, stocks like Procter & Gamble are often hit hard. He pointed out that while dividends are typically seen as a protective feature for such stocks, they become vulnerable when bond yields rise, as bonds become more attractive to investors. He added:
“… which brings me to the second reason this group has just been hammered. The dollar’s gotten too strong. These consumer packaged goods companies tend to be very big overseas… The consumer staples all trade together. If the dollar hurts a big international company like Procter & Gamble as it is, it’s gonna reverberate even into Clorox because they’re all in the same sector, and sector ETFs are like gravity. They pull all their subjects down, even the ones that shouldn’t.”
Cramer also highlighted another important challenge: pricing pressures. He noted that heavy discounts on consumer products and intense pricing competition are making it increasingly difficult for companies like Procter & Gamble to keep up.
4. Halliburton Company (NYSE:HAL)
Number of Hedge Fund Holders: 38
While Cramer expressed uncertainty about Halliburton Company’s (NYSE:HAL) upcoming earnings result, he highlighted Trump’s drilling goals.
“Wednesday we got some real firecrackers… Oil service kingpin, SLB, the old Schlumberger reported today and it was smashing. Now the pin action from that allowed competitor Halliburton to rally 2.2%, but the good numbers from SLB were largely from overseas, so the domestically oriented Halliburton won’t be able to put up that kind of surprise. The reason to buy HAL is because soon-to-be President Trump seems to want to drill everywhere, but playgrounds, although it’s too early to rule those out too.”
Halliburton (NYSE:HAL) provides a variety of products and services to the global energy industry, including solutions for production enhancement, cementing, and full drilling support.
As discussed in our article, Jim Cramer on Tesla and Other Stocks, before the company reported its third-quarter earnings in 2024, Cramer pointed out that Halliburton’s stock underperformed compared to SLB in the year.
He noted that it is because Halliburton (NYSE:HAL) is more reliant on the North American market, while international markets are currently performing better. While Cramer acknowledged that Halliburton continues to be a strong operator, he noted that its business mix is not well-suited for the present market conditions.
3. GE Vernova Inc. (NYSE:GEV)
Number of Hedge Fund Holders: 89
Cramer expressed optimism about GE Vernova Inc. (NYSE:GEV), noting that the data center industry continues to thrive and has an increasing demand for energy.
“Wednesday we got some real firecrackers. The data center business is red hot and in order to fuel these warehouses full of servers and, you know, send the air conditioning in and all sorts of electricity, well, what do you gotta do? You need more power plants. That means they’re likely to place orders with nat-gas turbine maker GE Vernova, that’s another one of last year’s best performers. I don’t think it’s done.”
GE Vernova (NYSE:GEV) is an energy company that provides products and services for generating, transferring, and storing electricity globally. While Cramer has expressed enthusiasm about nuclear stocks, he recently commented on GEV and said:
“I will say that the most important builder of nuclear plants in this country, GE Vernova is about as bearish as the promoters are bullish. I’ve tried to coax CEO Scott Strazik to be more positive on the prospects, but he won’t. After all the engineering hurdles, cost overruns, and balance sheet damage associated with his plants, he doesn’t expect anything commercially viable for about a decade so I don’t think you wanna be in any of these nuclear stocks for too long.”
2. United Airlines Holdings, Inc. (NASDAQ:UAL)
Number of Hedge Fund Holders: 54
United Airlines Holdings, Inc. (NASDAQ:UAL) is a major provider of air travel services, offering both passenger and freight transportation. Here’s what Mad Money’s host had to say about the company:
“Speaking of awesome quarters, we should get a first-class blowout from United Airlines, which is riding this incredible wave of airline profitability. When United reports after the bell, I think shareholders will be rewarded with a huge beat as the company’s benefiting from a lack of planes and a lack of competition that allowed ticket prices to go ever higher. As you know, not so good for consumers or the Consumer Price Index, but tremendous for shareholders. United, one of the best performers in the S&P 500 last year was at $38 back in August. Today, it closed at $107 bucks.”
Additionally, Cramer recently expressed his amazement at the performance of United Airlines (NASDAQ:UAL), calling it “simply astounding.” He explained that, for the first time in his career, he witnessed a trade transform into a long-term investment. Cramer pointed out that the turning point for the airline came when it began reducing capacity, notably cutting back 3% of its promised midyear capacity. He said he was initially stunned by this move, but it ultimately played a key role in the company’s impressive stock growth. He added:
“Oh, and get this, United still sells for less than eight times this year’s earnings. It can actually power higher. It might be a good buy. I would wait for a 5 to 8% pullback.”
1. 3M Company (NYSE:MMM)
Number of Hedge Fund Holders: 82
As 3M Company (NYSE:MMM) is set to report its fourth quarter 2024 earnings, Cramer praised the company’s CEO and bet that the company will perform well.
“How about Tuesday? Tuesday continues with the regular reporting season and we got some pretty compelling companies that I expect to talk about a brighter future, even if it’s also somewhat uncertain both politically and economically. 3M reports in the morning, and I bet that CEO Bill Brown, he’s a total hitter, I think he’ll deliver us an awesome quarter.”
3M (NYSE:MMM) provides diverse technology products across the safety, industrial, transportation, electronics, and consumer sectors, including abrasives, safety equipment, automotive solutions, and consumer goods. As a result of strong performance, the company raised its full-year adjusted earnings expectations for 2024.
The updated forecast for adjusted total sales growth is approximately 1%, up from the prior estimate of a range between -0.25% and +1.75%. 3M (NYSE:MMM) revised the adjusted organic sales growth forecast to about 1%, compared to the previous projection of flat to +2%. Additionally, the adjusted EPS forecast was adjusted to a range of $7.20 to $7.30, up from the prior expectation of $7.00 to $7.30.
While we acknowledge the potential of 3M Company (NYSE:MMM) 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 MMM 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 was originally published at Insider Monkey.
