In this article, we will take a detailed look Jim Cramer is Talking About These 10 Stocks.
Jim Cramer in a latest program on CNBC said that the market is narrowing again as he sees gains getting concentrated in big tech stocks again amid bond movements.
“If the bond market doesn’t start behaving and calming down, and long-term interest rates don’t stop going up, we are gonna start losing the groups that led us higher for months and go back to our bad old ways with just a couple of magnificent ones.”
Jim Cramer said that this trend was more or less expected as market assumptions following the 50bps rate cut by the Federal Reserve proved to be wrong down the road.
But then that darn double cut—we saw something that hasn’t happened since 1995. We saw loan rates go higher, not lower. It was a total buzzkill, and we’re beginning to feel it with earnings.
Cramer then talked about a latest earnings report from a notable homebuilder that showed soft results, indicating a weaker consumer. Cramer then summarized his thesis again on why he sees the overall market trajectory in what he called a “suboptimal situation.”
“If interest rates don’t stop rising quickly—they can go up slowly, but this quick rise means we’ll go right back to the same old story. Only a few big tech stocks were winning, while many more were losing. In other words, we’re on the verge of what I can describe as an extremely suboptimal situation if the bond market doesn’t settle down.”
READ ALSO 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In
For this article we watched several latest programs of Jim Cramer on CNBC and picked 10 stocks he’s talking about. With each company we have mentioned its hedge fund sentiment. 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).
10. Trump Media & Technology Group (NASDAQ:DJT)
Number of Hedge Fund Investors: 9
Answering a question about Trump Media & Technology Group (NASDAQ:DJT) in a latest program, Jim Cramer said:
“I want so much to be better at that one. That’s what I call an okay company. There’s just not enough information. No analysts, no coverage. I cannot get a bead on it.”
Perhaps the biggest bull case for DJT is the rising probability of Donald Trump becoming US President again. Trump Media & Technology Group (NASDAQ:DJT)’s core business is not impressive.
The platform has struggled to attract advertisers, despite reports of more than 2 million active users on Truth Social. A significant factor behind Trump Media & Technology Group (NASDAQ:DJT)’s revenue dip is a decline in web traffic. Despite an uptick in political betting odds for Trump’s potential presidency, this hasn’t sparked a rise in user numbers on the platform. During the spring and early summer, as his chances of a presidential win grew, CNBC noted that Truth Social’s traffic still slipped.
In its latest earnings reported in August, Trump Media & Technology Group (NASDAQ:DJT) posted a 30% drop in net sales year-over-year to $836,900, while operating losses grew from $3.8 million last year to $18.7 million.
9. GXO Logistics Inc (NYSE:GXO)
Number of Hedge Fund Investors: 29
A caller recently asked Jim Cramer about GXO Logistics. Here is what he said:
“I think you should hold it. It’s a really good company. It would be icing on the cake if you do get a takeover, but GXO’s been a winner. I’m not leaving that stock; I’m staying with it.”
GXO Logistics Inc (NYSE:GXO) manages supply chains for businesses by providing warehousing, transportation, and logistics services. They store products in strategically chosen warehouses and use advanced technology to optimize efficiency and reduce costs. Out of 974 facilities, 613 are leased, with only two owned. Leasing not only reduces costs but also offers flexibility, allowing them to scale operations easily as needed.
Analysts believe GXO Logistics Inc (NYSE:GXO) will grow on the back of the ecommerce revolution. Handling e-commerce orders is more profitable for GXO Logistics Inc (NYSE:GXO) than traditional wholesale or retail setups because it requires more handling. According to GXO Logistics Inc (NYSE:GXO), they can generate three times more revenue from e-commerce orders compared to wholesale and retail, with the revenue multiplier reaching up to six times in the case of returns.
The shift to e-commerce has been growing for over a decade, but the industry saw substantial growth following the COVID-19 pandemic. According to a chart from GXO Logistics Inc (NYSE:GXO)’s investor presentation, they estimate that e-commerce penetration as a percentage of total retail sales could double in six years, reaching approximately 30% by 2027.
Mar Vista Strategic Growth Strategy stated the following regarding GXO Logistics, Inc. (NYSE:GXO) in its first quarter 2024 investor letter:
“GXO Logistics, Inc. (NYSE:GXO) experienced a setback this quarter. Customer volumes dropped 9%, stalling any organic growth. This slump was primarily driven by weakness in the omnichannel retail and consumer packaging sectors. As a result, the company’s 2024 forecasts fell short of analyst expectations, leading to a drop in share price after the announcement.
Despite cyclical headwinds, there are signs of a turnaround for GXO. Management indicated that customer volumes in January have already begun to improve. Additionally, they expect easier comparisons in the later half of 2024 to further aid recovery. To us, this suggests that the first half of 2024 may be the cyclical low point, with a rebound on the horizon. Over the next few quarters, GXO should get back on track towards achieving its long-term financial goals.”
8. ARM Holdings Plc (NASDAQ:ARM)
Number of Hedge Fund Investors: 38
A caller recently asked Jim Cramer about ARM Holdings Plc (NASDAQ:ARM).
Cramer said “yes, ARM’s good” and recommended the investor to buy the stock.
Cramer said that ARM Holdings Plc (NASDAQ:ARM) has a “tremendous” relationship with Softbank’s Masayoshi Son.
“I think that the support there is gonna make it so he got a lot of runaway. I like him.”
William Blair analyst Sebastian Naji recently started covering Arm Holdings PLC – ADR (NASDAQ:ARM) with an Outperform rating.
The analyst said the chipmaker is seen as a “critical vendor” of computing intellectual property with “best-in-class” financials. He said the company generates revenue from over 29B chips sold in the mobile, automotive, IoT, and data center markets.
“Arm’s royalty/licensing revenue model drives best-in-class profitability— R&D is the largest expense, 35% of total revenue in fiscal 2024. With expanding royalty rates helping drive better operating leverage (long-term target of 60% non-GAAP operating margin), we see room for sustained EPS and free cash flow growth,” the analyst said.
Arm Holdings PLC – ADR (NASDAQ:ARM) has unveiled its latest processor design, v9, which features significant upgrades like enhanced encryption and vector processing. These improvements have allowed ARM to double its take-rate compared to the previous v8 design, which is expected to boost royalty revenue over the next few years, according to analyst Naji.
The company, led by Rene Haas, is also seeing growth from its mobile CSS and data center Neoverse subsystems, driving new licensing activity. Arm Holdings PLC – ADR (NASDAQ:ARM) is gaining traction in the data center market, traditionally dominated by Intel. With hyperscalers like Amazon, Google, Microsoft, and Meta developing their own chips and Nvidia leading the AI accelerator space, Arm Holdings PLC – ADR (NASDAQ:ARM) is positioned to benefit from this growing sector. Naji estimates ARM’s data center business could account for 15% of its royalty revenue by 2025.
7. Boeing Co (NYSE:BA)
Number of Hedge Fund Investors: 42
Jim Cramer in a recent program recommended investors to buy Boeing Co (NYSE:BA) on the weakness because of the company’s dominance in the market.
“Welcome to the world of duopoly. The worse the financials might be, the better the buy, because as soon as the strike is over and they raise some money, they will be back on the road to profitability. The company is in awful shape, but only two companies can make commercial aircraft. And Boeing is one of them. The demand for planes is off the charts. They will be fine once they raise the cash.”
However, Boeing Co (NYSE:BA) acknowledged that Boeing has become a “colossal disaster” but he’s still hopeful of a turnaround.
“They have to get back to the basics, building the best aircraft. It can do that if they can close out what is losing money and get the machinists back with maximum supervision. It will have enough orders to feast on for years. That’s why it can spring back.”
Jim Cramer was previously bullish on Boeing Co (NYSE:BA). Why? The new CEO was the main reason.
Kelly Ortberg has a degree in Mechanical Engineering, and brings a technical background to the role, a shift from the accounting-focused leadership that investors have found concerning.
Boeing Co (NYSE:BA) is also increasing production rates, having already increased output and reactivated its third 737 MAX assembly line. The company has submitted a comprehensive plan to the FAA, aiming to surpass the current cap of 38 MAX airplanes per month. While these measures will not immediately impact earnings, they signal Boeing Co (NYSE:BA)’s commitment to sustainable growth.
On the certification front, Boeing Co (NYSE:BA) is progressing with solutions for the 737 MAX 7 and MAX 10, and has entered a new phase in the 777X certification campaign. These developments are seen as positive.
Boeing Co (NYSE:BA) has made progress with the 737 MAX program. Boeing Co (NYSE:BA) has reduced traveled work, leading to cleaner fuselages and improved quality and reliability. Boeing’s submission of a comprehensive safety and quality plan to the FAA marks an important milestone. Production has increased from a low single-digit rate in the first quarter to 25 airplanes per month in June and July, though still short of the target of 38 airplanes per month by year-end. This increase suggests progress in managing manufacturing quality.
However, with worker strikes ongoing and credit ratings in danger, Boeing Co (NYSE:BA)’s journey back to normality will be long and hard.
6. Kroger Co (NYSE:KR)
Number of Hedge Fund Investors: 46
A questioner recently asked Jim Cramer whether Kroger Co (NYSE:KR) was undervalued. Cramer replied “you are right.”
“With Albertson, I think it’s better because they’ve got to go up against Costco, Walmart, and Amazon. Without it, they still do well, but frankly, look, this administration—I think they’ll hold this deal up from now until, I don’t know, this thing’s tapped out.”
In the most recently reported quarter, Kroger Co (NYSE:KR) saw sales of $33.91 billion, a modest 0.2% rise from the $33.85 billion posted in the same quarter last year. The figure also surpassed analyst expectations by $207 million.
Kroger Co (NYSE:KR) said there was a 17% surge in delivery sales, driven by the company’s Customer Fulfillment Centers, with its online grocery customer base growing 14%. Kroger’s digital sales strategy, once unexpected in the grocery sector, has gained traction.
5. Chevron Corp (NYSE:CVX)
Number of Hedge Fund Investors: 64
Jim Cramer recently visited Chevron Corp (NYSE:CVX)’s offshore facility in the Gulf of Mexico. During a program on CNBC from the facility, Cramer said that Elon Musk was “wrong” when he said during the latest Tesla event that ICE cars are becoming a “niche business.”
“He (Elon Musk) said gasoline-powered cars will soon be a niche business, invoking the horse—a veiled reference to the buggy. I say, wait a second. Chevron Corp (NYSE:CVX)’s a big company too. CEO Mike Wirth, our guest tonight, did not spend more than $5 billion on this thing because fossil fuel-powered cars will be a niche business. Elon Musk, while he talks a better game than just about anyone, and I think Tesla’s got tons more room to run—how about that? But he’s wrong on this,” Cramer said.
The CNBC host then made the case of fossil fuels and natural gas and said conventional energy would be needed to fulfill the insatiable demand coming from data centers.
“If we need more energy, we’re going to get it from what comes out of the ground in places like this—fossil fuels that will power the data center, specifically natural gas.”
