Jim Cramer, the host of Mad Money, took a moment on Wednesday to reflect on the latest market developments as earnings season progresses, sharing his thoughts on how investors can identify stocks that are unfairly punished and present solid buying opportunities.
“This market has the memory of a mayfly that creates a ton of opportunities so… I want to help you find them.”
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Cramer stressed that time and again, he has seen growth stocks severely impacted by minor bits of bad news, such as small downgrades or slight concerns about a quarter’s performance. In these cases, he noted, the punishment rarely fits the crime, if a real issue even exists.
Cramer also recently weighed in on the ongoing trade tensions with China. He urged Wall Street to start taking President Trump’s policies more seriously, pointing out that Trump had negotiated a deal that granted China a much lower tariff than Canada received. Cramer dismissed the idea that China’s response was an equal counterattack, calling such a notion “nonsense” and “idiocy.” He added:
“Now, if Wall Street took Trump seriously, they’d know that China played softball with its retaliation just like Trump played softball with that 10% tariff.”
He elaborated that much of the recent panic, which had escalated on Sunday night, shifted a bit to optimism, as people began to realize that the president had managed to negotiate a deal. Acknowledging the presence of hardliners within the White House who are keen on taking a tougher stance on China, Cramer noted that those individuals had lost the battle.
He pointed out that Trump’s objective was to broker a deal that could generate revenue for the U.S. Treasury while providing American businesses with opportunities in China. Cramer emphasized that this goal should have been clear to anyone who had been watching the Chinese stock market, as stocks that trade in China surged recently.
Jim Cramer Highlighted Buying Opportunities in 13 Stocks
Our Methodology
For this article, we compiled a list of 13 stocks that were discussed by Jim Cramer during the episode of Mad Money on February 5. 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 Highlighted Buying Opportunities in 13 Stocks
13. Palantir Technologies Inc. (NYSE:PLTR)
Number of Hedge Fund Holders: 43
Palantir Technologies Inc. (NYSE:PLTR) is a leading provider of software solutions that specialize in complex data integration and decision-making. Commenting on the company, Cramer said, “Oh, and, let’s not forget the ontologists at Palantir. Those guys can do no wrong, especially in the eyes of their buddy-buddy investors.”
Cramer has been bullish on Palantir (NYSE:PLTR) for a few months now and recently, he said:
“You hold it, you hold it and when it crops back down, you buy back the stock that you sold because this company is a winner. They have really smart people and a lot of good contracts. It’s the best data analysis company in the world, Palantir.”
12. Palo Alto Networks, Inc. (NASDAQ:PANW)
Number of Hedge Fund Holders: 64
Palo Alto Networks, Inc. (NASDAQ:PANW) is a cybersecurity company that provides a wide range of security solutions. During the episode, Cramer said, “CloudFlare and Palo Alto Networks, they’re comeback kids too, every time.”
According to Cramer, Palo Alto’s (NASDAQ:PANW) CEO has turned it around as he stated in January:
“This one is Nikesh Arora. When he took over at Palo Alto Networks, PANW, a once powerful cybersecurity company that had fallen behind the others, people thought turning this business around was too big a task. At best, he’d just be a deal maker and a so-so one at that. I knew Nikesh is [a] brilliant competitive guy whom I wanted to bank with, which is why we bought the heck outta the stock… Now, Palo Alto had a $19 billion market capitalization when Nikesh took over on June 6th, 2018, it’s now worth $123 billion. He created $104 billion in value.”
