Jim Cramer, the host of Mad Money, recently shared valuable investing lessons drawn from his 40 years of experience in the field. He noted that he often emphasizes the importance of discipline over conviction, repeating this message regularly on his show.
“I am constantly on this show telling you that discipline always trumps conviction. I tell it to you over and over and over again. In other words, no matter how much you may love a stock, no matter how enthralled you are with the underlying story, if the rules say sell, you sell it.”
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Cramer also highlighted one of his fundamental investing rules: “Bulls make money. Bears make money. Pigs, well, they get slaughtered.” He explained that this phrase serves as a reminder, especially when stocks rise sharply, and investors become overly confident in their gains. Cramer observed that, too often, people get intoxicated by their profits and start believing they are invincible. However, it is precisely at that point of overconfidence that caution is most needed, as acting like a pig can lead to significant losses. He then said:
“Just to be clear, bulls don’t have a monopoly on piggishness. The same idea applies to investors who press their bets too shortly, too aggressively on the short side.”
He pointed out that the same principle applies to those who aggressively short stocks. He explained that while there have been significant market declines, such as the dot-com crash of 2000 and the financial crisis of 2008-2009, most stocks tend to recover fairly quickly. Even during the Fed-induced market downturn in late 2021, those who remained too committed to short positions for too long ended up facing painful losses. By the fall of 2022, markets had rebounded, and those who had not adapted to the changes were left with nothing.
“Why is this rule so important? Simple. One of my chief goals is to help you stay in the game. You know that’s the hardest part of investing. It’s holding on through the difficult periods, taking short-term pains so you can have long-term gains, which is what’s happened in the stock market for, for a century.”
Our Methodology
For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on February 24. We listed the stocks in ascending order of their hedge fund sentiment as of the fourth quarter of 2024, which was taken from Insider Monkey’s database of over 1,000 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Jim Cramer Discussed These 7 Stocks
7. Pagaya Technologies Ltd. (NASDAQ:PGY)
Number of Hedge Fund Holders: 24
A caller asked if they buy, sell, or trade Pagaya Technologies Ltd. (NASDAQ:PGY), and here’s what Cramer said in response:
“You know, it’s up so much. It, fintech, there’s only a couple fintechs that have really stayed. I want you to take some profits. Let’s just do it. Let’s just do that. I’m gonna ask you to ring the register.”
Pagaya Technologies (NASDAQ:PGY) is a technology company that uses data science and proprietary AI technology to develop software solutions that help financial institutions and investors originate loans and other assets.
The company recently reported strong financial results for FY’24, with network volume rising 17% to $9.7 billion and $6 billion raised through 17 asset-backed securitizations. Pagaya Technologies (NASDAQ:PGY) also maintained its position as the top personal loan ABS issuer in the U.S. by issuance size. Total revenue and other income increased by 27% to $1.03 billion, while adjusted EBITDA reached a record $210 million, up from $82 million in FY’23.
6. New Fortress Energy Inc. (NASDAQ:NFE)
Number of Hedge Fund Holders: 34
Cramer was asked about New Fortress Energy Inc. (NASDAQ:NFE) and his response was:
“Alright… Well, I don’t know if we’re gonna bring it back. I kind of like it. I would like to do that. But I, New Fortress Energy is this company that we profiled as being not a great company and we are going to continue to say it was not a great company. It’s in the archives. Can’t do anything about it. It’s a bad one.”
New Fortress Energy (NASDAQ:NFE) is an integrated energy infrastructure company that provides services across natural gas procurement, liquefaction, shipping, logistics, and power generation, while also leasing floating storage and regasification units and LNG carriers to customers. Interestingly enough, in October 2024, Cramer stated:
“… This Wes Edens, he is so good. It’s down like three quarters, like down like 75%. I think that you have to stick with it. I’ve been wrong. I’ve been wrong in New Fortress because I believe in Wes so closely. I’d love Wes to come back on the show.”
Over the last 12 months, New Fortress Energy (NASDAQ:NFE) stock declined more than 70%.
5. e.l.f. Beauty, Inc. (NYSE:ELF)
Number of Hedge Fund Holders: 35
A caller asked if they should hold or sell e.l.f. Beauty, Inc. (NYSE:ELF) and Cramer replied:
“Oh my, I got to tell you, down 40%, everyone’s decided that it doesn’t work anymore. It’s got tariffs, blah, blah blah. I am not gonna sell Tarang Amin down 40%, that doesn’t mean I’m gonna buy, but I am not gonna sell it. That’s crazy. People hate it. Let’s just wait. Wait, don’t bite. Not yet.”
e.l.f. Beauty (NYSE:ELF) provides a diverse range of beauty and skincare products through several brands, including e.l.f. Cosmetics, e.l.f. Skin, Well People, Naturium, and Keys Soulcare. In early February, amid tariff concerns, Cramer commented on the company as he said:
“Yeah, well it’s gonna report… They make this stuff in China is real bad and it’s gonna hurt the profit margin and we got to hear what they’re gonna have to say. I have to tell you, I’m very uncomfortable buying something that is all sourced in China given the fact that we don’t know what the president’s going to do if China doesn’t play ball.”
4. Energy Transfer LP (NYSE:ET)
Number of Hedge Fund Holders: 37
A caller asked if it was smart to buy more of Energy Transfer LP (NYSE:ET) as the stock had a pullback recently. In response, Cramer said:
“Yes. ET is smart. I mean, look, you buy, this is the way you buy ET, just so you know, this is a pipeline company. You, you, you buy it by the percentage yield. So it’s got a 7% yield now, you buy some, 8, you buy some, 9, you buy some. That’s how you buy these stocks and I’m gonna continue to pound that that’s the way to do it.”
Energy Transfer (NYSE:ET) focuses on the transportation of natural gas and crude oil, operating an extensive pipeline network and facilities across Texas, Oklahoma, and other states. After the 2024 election results were announced, Cramer, discussing Trump trades, commented:
“Other than the producers, what works if you’re betting on a natural gas renaissance under Trump… How about a pure play on pipelines? Much easier to build these under a Republican administration. There are plenty of good options here. I’ve been consistently bullish on Energy Transfer and Kinder Morgan, they yield 6.8% and 4.0%, respectively.”
3. Modine Manufacturing Company (NYSE:MOD)
Number of Hedge Fund Holders: 43
Cramer noted that potential sellers were swarming Modine Manufacturing Company (NYSE:MOD) as he explained:
“Yeah, I gotta tell you… people decided that that is part of the data center and the CFO sold a lot of stock so people are itching to get out. It has come down so much. I don’t know what they’re itching about.”
Modine Manufacturing (NYSE:MOD) offers thermal management products, including heat transfer coils, unit heaters, cooling systems for data centers and powertrains, as well as coatings and maintenance services.
Fred Alger Management stated the following regarding Modine Manufacturing Company (NYSE:MOD) in its Q4 2024 investor letter:
“Modine Manufacturing Company (NYSE:MOD) provides a diverse range of systems and solutions that improve indoor air quality, cool data centers, conserve natural resources, reduce harmful emissions, and promote environmentally friendly refrigerants. Since the appointment of a new CEO in December 2020, the company has undergone a significant transformation, simplifying its business, aligning strategies by market verticals, and adopting the 80/20 business philosophy (i.e., prioritizing 20% of inputs that drive 80% of outcomes) to drive decision-making. Despite reporting strong fiscal second-quarter results, shares detracted from performance due to the absence of a forward guidance raise, which was attributed to the company’s strategic move away from lower-margin vehicle business. In our view, Modine remains in the midst of a significant transformation, with increasing recognition in the high-growth data center cooling market, where it is positioned as a strong competitor and potential market share gainer.”
2. Abercrombie & Fitch Co. (NYSE:ANF)
Number of Hedge Fund Holders: 51
When a caller mentioned that Abercrombie & Fitch Co. (NYSE:ANF) announced that there might be headwinds owing to currency, Cramer replied:
“No, it’s not really currency. They had promised a very big number and they failed to deliver and it has been paying the price ever since. This is a, I mean, I guess I could say, I’m gonna say it, Fran Horowitz is a good manager, it’s a disaster and they, I don’t know how they can turn it around, but they are gonna report on the 5th of March. Let’s hope they get it right and if they do, they may have to get it right without me because that last quarter was so bad.”
Abercrombie & Fitch (NYSE:ANF) is a retailer that operates across multiple channels, offering a variety of products such as clothing, personal care items, and accessories. The products are sold under several brand names, including Abercrombie & Fitch, abercrombie kids, Hollister, and Gilly Hicks.
1. FedEx Corporation (NYSE:FDX)
Number of Hedge Fund Holders: 66
FedEx Corporation (NYSE:FDX) was mentioned during the episode, and here’s what Cramer had to say:
“Okay, so FedEx, there were a lot of rumors that that Amazon’s gonna do more in the, in the kind of the trucking business that FedEx does. Now let me just tell you something. FedEx doesn’t do anything with Amazon. All right? FedEx stock is down very big. It’s at $253. I am calling it an opportunity. I think Raj Subramaniam is doing a terrific job and I think that, you know, what is the downside here? I mean, at the absolute low, it was at $239. [Now] it’s at $253… I think that this is where you start a position right now.”
FedEx Corporation (NYSE:FDX) provides a range of services including express delivery, small-package shipping, freight transportation, and various business support and e-commerce solutions.
While we acknowledge the potential of FedEx Corporation (NYSE:FDX) 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 FDX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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