During September 30’s episode of Mad Money, CNBC’s Jim Cramer delved into the previous three months and the market’s events. He identified some positive developments amidst the turbulence in the market.
Cramer highlighted that Dow inched up 17%, the S&P 500 went up 42% while Nasdaq gained 38% during the months. He remarked, “For once, good news was actually good news and interesting.” He went on to say that miracles still happened in the stock market’s third quarter. He pointed out that July, August, and September yielded remarkable returns, even highlighting the typically troublesome month of September, which saw the broader market rising significantly.
Cramer elaborated on the lead-up to the Federal Reserve’s decision to cut rates by 50 basis points. He characterized the economic landscape as having “no landing at all,” explaining that the economy continued to grow, inflation decreased, and unemployment ticked up.He suggested that the central bank laid the groundwork for a significant rate cut, which was the reason that there was no panic on Wall Street after the cut. The former hedge fund manager also praised Federal Reserve Chair Jerome Powell for achieving the challenging feat of a double rate cut without shocking the markets.
Moving on, Cramer talked about how the market’s breadth expanded as well, with many sectors gaining traction beyond the dominant Magnificent Seven tech stocks. He noted that a variety of industries, including banks, utilities, retail, healthcare, housing, and transportation, enjoyed their moment in the spotlight.
As for the upcoming election, he referenced Michael Cembalest of J.P. Morgan Asset Management, who described it as “the most polarized election in 100 years.” Cramer observed that, despite the political drama surrounding the elections, Wall Street remained largely unfazed, even in response to significant events like Vice President Kamala Harris potentially replacing President Biden on the Democratic ticket and the attempted assassination of former President Donald Trump.
Cramer also highlighted a shift in the housing market, pointing out the first signs of relief from formerly soaring inflation figures. He suggested that an increase in available homes could be the breakthrough needed to address this intractable asset class that has resisted price declines.
In terms of international markets, he noted that the Chinese market staged a rally, even in light of dismal economic news, owing some of this movement to government-ordered buybacks and influxes of capital.
Cramer commented on the ongoing speculation about stagflation, particularly concerning oil prices, reminiscent of the oil crisis in 1973. He addressed the ongoing conflict in the Middle East, mentioning that Saudi Arabia had abandoned its unofficial price target of $100 per barrel in favor of increasing production.
While many believe that oil prices could soar at any moment, Cramer expressed skepticism, suggesting that although a spike could still occur due to geopolitical factors, he thinks those fears may be overstated.
Reflecting on the past nine months, he concluded that despite the potential for stagflation, 2024 has surprisingly turned out to be a great year for the stock market, defying expectations.
Jim Cramer is Talking About These 12 Stocks
Our Methodology
For this article, we compiled a list of 12 stocks that Jim Cramer mentioned during his episode of Mad Money on September 30. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 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 is Talking About These 12 Stocks
12. Redwire Corporation (NYSE:RDW)
Number of Hedge Fund Holders: 8
Redwire Corporation (NYSE:RDW) is a global space infrastructure and innovation company operating in the global space infrastructure sector. It provides essential solutions for both government and commercial clients across the United States, Europe, and internationally.
Cramer recently said, “Everybody wants to be in the space business, and I’ve got to tell you, I don’t.” While Cramer’s bearish, it is worth noting that the company’s stock is up by over 132% year-to-date.
The company’s organizational structure consists of several business units that focus on key areas, including space commercialization, digitally engineered spacecraft, on-orbit servicing, and advanced sensors and components. The company has 16 facilities spanning over 227,000 square feet in the U.S. and Europe.
In September, Redwire (NYSE:RDW) made headlines with the successful completion of its acquisition of Hera Systems, Inc., a company specializing in spacecraft development for national security missions.
By integrating Hera Systems into its operations, the company seeks to expand its capabilities to support specialized national security missions in geostationary orbit (GEO). As per the company, Hera Systems has demonstrated profitable topline growth, reporting $15 million in revenue for the year ending December 31, 2023.
The acquisition propels Redwire (NYSE:RDW) forward, providing it with the capabilities of developing a new class of high-performance spacecraft tailored to meet the evolving demands of national security operations in increasingly contested environments.
Hera is currently contracted to manufacture three satellites for an on-orbit servicing demonstration under a U.S. Space Force contract. As a result of this strategic acquisition, the company has adjusted its full-year 2024 revenue guidance from $300 million to $310 million.
11. Banco Santander, S.A. (NYSE:SAN)
Number of Hedge Fund Holders: 9
Banco Santander, S.A. (NYSE:SAN) is a global financial services provider and offers a wide range of banking solutions. The company runs through several segments, including Retail Banking, Santander Corporate & Investment Banking, Wealth Management & Insurance, and PagoNxt. Cramer mentioned the company and said “If you want a foreign bank, please go for Banco Santander, that’s a real good one.”
Banco Santander, S.A.’s (NYSE:SAN) services encompass everything from demand and time deposits to mortgages, consumer financing, and various investment products. Additionally, it offers asset management, private banking, and insurance, alongside providing digital payment solutions and online banking services tailored to retail, corporate, and institutional clients.
In the first half of 2024, the company reported an attributable profit of €6.059 billion, which is a 16% increase compared to the same period last year. The growth was attributed to a significant rise in net interest income across all global business sectors and regions, coupled with effective cost management that successfully offset the anticipated rise in provisions. The bank’s focus on improving profitability resulted in a return on tangible equity (RoTE) of 15.9%, and EPS climbed to €0.37, marking a 19% increase.
Moreover, Banco Santander’s (NYSE:SAN) customer base has expanded significantly, with more than 4 million new customers added year-on-year, bringing the total to 168 million. Active customers reached 101 million, an increase of nearly 2 million compared to the previous year.
In light of this strong performance, the company has revised its 2024 targets upward. The bank now anticipates high-single-digit revenue growth for the year, adjusting its previous forecast of mid-single-digit growth, and expects a RoTE exceeding 16%, an improvement from its earlier estimate of just 16%.
10. Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL)
Number of Hedge Fund Holders: 17
In his September 30’s Mad Money episode, Cramer said not to sell Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) and highlighted that the stock lifted in the previous week. It went up 13.35% between September 23 and September 27.
Established in 1969, the company runs a distinctive chain of restaurants combined with gift shops across the United States. These establishments serve a variety of meals, including breakfast, lunch, and dinner, while also offering dine-in, pick-up, and delivery options.
The gift shops feature an eclectic range of items, from rocking chairs and seasonal gifts to apparel and specialty foods, which offer a unique shopping experience alongside dining.
Cramer made a specific note of the CEO, Julie Felss Masino, saying that “she’s doing a good job.” Recently, under the leadership of the new CEO, Cracker Barrel (NASDAQ:CBRL) is navigating a period of transformation. In May during a conference call, Masino acknowledged that the company “has lost some of its shine” and requires changes to attract both current and new customers.
During the fiscal Q4 earnings call, Masino articulated five strategic pillars that will guide the company’s future: refining the brand, enhancing the menu, evolving the in-store and guest experience, excelling in digital and off-premise services, and elevating the employee experience. These initiatives show management’s comprehensive approach to revitalizing the brand.
During the call, Masino highlighted the company’s optimized pricing initiative, which has been positively received as it contributed to increased customer traffic and sales, particularly in remodeled pilot stores.
A significant aspect of Cracker Barrel’s (NASDAQ:CBRL) strategy has been the introduction of its loyalty program, Cracker Barrel Rewards, which launched just a year ago. With 6 million members already, the program has exceeded management’s expectations and is a reminder of the brand’s value proposition.
Masino said that members tend to visit the restaurants 50% more frequently and spend 10% more per visit compared to nonmembers. Additionally, these loyal customers show a strong inclination toward retail purchases, with average spending on gift shop items about 40% higher than that of non-members.
9. CAVA Group, Inc. (NYSE:CAVA)
Number of Hedge Fund Holders: 33
According to Cramer, CAVA Group, Inc. (NYSE:CAVA) is “one of the great new concepts that we have seen in this market” and the market seems to echo this sentiment as the stock has gained approximately 300% over the past year.
The company runs a chain of Mediterranean fast-casual restaurants across the United States under the CAVA brand. The restaurant concept focuses on healthful, flavorful food options while also offering a variety of dips, spreads, and dressings available in grocery stores.
With a market capitalization exceeding $13 billion, the company is finding its strong footing as a player in the fast-casual dining space with its blend of convenience and bold culinary experiences.
Since going public in June 2023, CAVA (NYSE:CAVA) has made ambitious plans for growth, setting a target of reaching 1,000 locations by 2032. As of the end of the first quarter following its IPO, the company operated 279 restaurants, and by the second quarter of 2024, that number had increased to 341. The rapid expansion is proof of management’s ambitious strategy of scaling the company’s presence in the market.
In the second quarter, it reported a 9.5% increase in customer traffic. The company opened 18 net new restaurants during this period and its average unit volume reached an impressive $2.7 million, which points to the effectiveness of its business model.
Furthermore, the second-quarter same-store sales surged by over 14%, a sign that existing locations are gaining popularity and drawing in more customers. The company seems to be on a good track and Cramer has recommended to hold on to the stock and buy more if it comes down.
Next Century Growth Investors, LLC stated the following regarding CAVA Group, Inc. (NYSE:CAVA) in its first quarter 2024 investor letter:
“CAVA Group, Inc. (NYSE:CAVA) is a fast casual restaurant chain serving authentic Mediterranean cuisine, featuring customizable bowls and pitas. CAVA currently owns and operates >300 stores, and the company targets a 15% plus new store growth rate. The intermediate goal is to have 1,000 stores by 2032 with plenty of opportunity to grow beyond that level. The company already delivers solid restaurant level margins >20% and they believe 3-5% same store sales growth is achievable over time. As the business matures, they should be able to leverage G&A expense which should lead to strong earnings growth over many years.”
8. BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ)
Number of Hedge Fund Holders: 34
Talking about BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ), Cramer said that he likes the stock. Cramer said, “This thing sells 21 times earnings.” It is a Massachusetts-based company that operates a network of warehouse clubs across the eastern United States. Since its inception in 1984, the company has established a significant presence, currently managing 244 clubs and 178 BJ’s Gas locations across 20 states.
It offers a diverse range of products, including groceries, general merchandise, gasoline, and various other services. It offers its products online through its websites, BJs.com, BerkleyJensen.com, and Wellsleyfarms.com alongside a dedicated mobile app.
The second quarter marked the tenth consecutive quarter of increased customer traffic, which shows a strong upward trend in business performance. BJ’s Wholesale (NYSE:BJ) reported a 9% rise in membership fees and it was the highest growth in member count since the onset of the pandemic.
The surge was further supported by significant increases in premium tier memberships and impressive renewal rates, which is evidentiary of a positive response from the customer base. During the earnings call, management mentioned that the digital segment is also thriving, with substantial growth that positions the company well for future opportunities.
BJ’s Wholesale (NYSE:BJ) repurchased 451,982 shares of common stock in the second quarter, amounting to approximately $40.4 million. Over the first half of fiscal 2024, a total of 857,092 shares were bought back, totaling $70.6 million. With $118.7 million still available for further repurchases, the company remains focused on returning value to shareholders.
ClearBridge Investments stated the following regarding BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) in its Q2 2024 investor letter:
“Stock selection in the consumer staples sector also proved beneficial, primarily driven by our holdings in Casey’s General Stores (CASY) and BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ). BJ’s, which operates warehouse clubs providing perishable, general merchandise, gasoline and other ancillary services, continues to exceed expectations. With inflation continuing to weigh on consumer spending, the company’s membership channel continues to grow due to its perceived value to customers.”
7. Affirm Holdings, Inc. (NASDAQ:AFRM)
Number of Hedge Fund Holders: 34
Affirm Holdings, Inc. (NASDAQ:AFRM) operates a payment network that spans the United States, Canada, and beyond. The company provides a comprehensive platform that includes point-of-sale payment solutions for consumers, merchant commerce solutions, and a user-friendly app tailored for consumers. Cramer called the stock “real good” and said that it is “going higher.” Over the last 12 months, the stock is up by over 90%.
In a rapidly evolving industry, the company is positioning itself as a player in the competitive buy now, pay later (BNPL) sector, competing with other firms such as Klarna Bank AB. Max Levchin, the founder and CEO, has commented that the company is outpacing its competitors in this crowded market, noting a significant demand for its services.
In June, Affirm Holdings (NASDAQ:AFRM) announced that its BNPL loans would be integrated with Apple Pay, and as of September 16, eligible users could utilize this feature when checking out online or in-app on iPhones and iPads.
The integration allows Apple Pay users in the U.S. to request flexible payment options, splitting purchases into biweekly or monthly installments with attractive terms, including options for as low as 0% APR. This collaboration improves the user experience as it combines the convenience and security of Apple Pay with the company’s focus on transparency and no hidden fees.
In September, Mizuho Securities assigned the stock an Outperform rating with a price target set at $65. The analysts pointed to favorable conditions for the company, especially following the Federal Reserve’s decision to reduce interest rates by 50 basis points.
The firm sees this development as beneficial for the company for two key reasons: lower rates improve revenue less transaction costs and is likely to attract new customers or encourage existing users to take on additional debt.
Furthermore, the analysts predict that the reduction in rates could lead to a substantial increase, estimated between 30% to 35%, in gross merchandise volume for fiscal 2027. This, combined with the company’s operating leverage, could potentially result in earnings per share that double or even triple current consensus forecasts, according to the analysts.
6. Nextracker Inc. (NASDAQ:NXT)
Number of Hedge Fund Holders: 39
Nextracker Inc. (NASDAQ:NXT) is an energy solutions provider specializing in solar tracking and software solutions designed for utility-scale and distributed generation solar projects both in the United States and internationally.
During his Mad Money show’s Lightning round, Cramer said that he is not going to trust Nextracker Inc. (NASDAQ:NXT) “because it is one of the most poorly acting stocks on good and bad days.” He added that he finds it incredibly disturbing.
On September 3, Jefferies initiated coverage of the stock with a Hold rating and a $46 price target. The analyst views the company as a unique success story within the clean tech arena and highlights its history of beating earnings expectations. However, the firm also pointed to sector challenges, a recent change in the CFO position, and potential project delays as factors that create a complex risk-reward scenario for investors.
An industry note from Philip Shen, managing director of Roth Capital Partners, in April, highlighted some challenges that could impact the industry. He cautioned that the United States may soon face another round of tariffs, which could affect solar equipment prices significantly.
The Biden administration’s imposition of import tariffs on products from China and Southeast Asia has already raised concerns among developers about increased module costs. It has created unease in the solar market, as new tariffs could disrupt pricing and introduce volatility at a time when the industry is seeking stability and effective support for domestic solar manufacturers.
During the Q1 FY25 earnings call, Nextracker Inc.’s (NASDAQ:NXT) management characterized the potential impact of tariffs under the AD/CVD laws as a secondary headwind and acknowledged that these issues could delay some projects.
5. SharkNinja, Inc. (NYSE:SN)
Number of Hedge Fund Holders: 52
Talking about SharkNinja, Inc. (NYSE:SN), Cramer exclaimed, “What a stock.” It spun off from its parent company, JS Global Lifestyle Company Limited at the end of July 2023. Since its separation, the stock has gained approximately a whopping 300%.
The company is a product design and technology company known for delivering consumer solutions globally. The company provides a wide range of appliances, including cleaning, cooking, food preparation, and beauty products, as well as items designed for home environments.
The company markets its offerings through a combination of traditional retail outlets, e-commerce platforms, distributors, and direct-to-consumer channels, operating primarily under the Shark and Ninja brands.
Cramer stated that SharkNinja (NYSE:SN) executes “like you wouldn’t believe” and wished that he had bought the stock. In the first half of 2024, the company reported a remarkable 28.2% increase in net sales, reaching $2.31 billion, up from $1.8 billion during the same period the previous year.
When adjusted for certain factors, net sales saw an even more impressive rise of 32.9%, driven by significant growth across all four major product categories: Food Preparation Appliances, Cooking and Beverage Appliances, Cleaning Appliances, and Other products, which include beauty and home environment items. The company has a strong market performance as each of these categories experienced at least double-digit growth during the second quarter.
It has also made strides in expanding its market share and diversifying its product offerings. In 2024 alone, the company has ventured into three new subcategories, bringing its total to 34, an increase from 27 at the end of 2022.
A key element of the growth strategy is the company’s focus on international markets. In the second quarter, the company’s international sales surged by 46%, building on a remarkable 66% growth in the same quarter last year.
The UK remains SharkNinja’s (NYSE:SN) largest international market, reporting nearly 7% growth in the second quarter and a 10% increase in the first half of the year. Its UK operations are now characterized by greater diversification and profitability.
In Continental Europe, the company experienced impressive triple-digit growth in Germany and France, despite overall market stagnation in those regions. The company is actively expanding its presence and brand recognition in these countries and management sees substantial opportunities in markets such as the Nordics, Benelux, Poland, Italy, Spain, and the Middle East.
Ave Maria World Equity Fund stated the following regarding SharkNinja, Inc. (NYSE:SN) in its Q2 2024 investor letter:
“Top contributors to performance included SharkNinja, Inc. (NYSE:SN) and Taiwan Semiconductor Manufacturing Company Limited. SharkNinja, Inc. is a global product design and technology company focused on creating solutions that increase efficiency, convenience and enjoyment of consumers’ daily tasks and improve everyday lives. The company has built two billion-dollar brands, Shark and Ninja, and has a proven track record of establishing leadership positions by disrupting numerous household product categories, including cleaning, cooking, food preparation, home entertainment and beauty.”
4. Airbnb, Inc. (NASDAQ:ABNB)
Number of Hedge Fund Holders: 63
Airbnb (NASDAQ:ABNB) operates a globally recognized platform that connects hosts and guests. The company facilitates a wide range of accommodations and experiences. The marketplace is accessible through both online and mobile platforms.
It allows users to book various options, including private rooms, primary residences, and vacation homes. During September 30’s Mad Money episode, Cramer suggested to “buy a little more” of Airbnb, Inc. (NASDAQ:ABNB), mentioning it being down 7% over the past year and that he likes it.
Cramer emphasized that the company is run by Co-Founder Brian Chesky and called him conservative. Under the leadership of Chesky, the company has navigated significant challenges, including a unique venture into breakfast cereals during a financially difficult period in 2008 to keep the business afloat.
Recently, during his address at the 2024 Skift Global Forum, Chesky posited a vision for the company’s future and said that a new phase of the company is coming. He expressed optimism about the potential for innovation, projecting that the company might unveil two to three initiatives each year capable of generating an additional billion dollars in revenue annually.
Chesky emphasized the importance of promoting the advantages of hosting and advancing the tools available to hosts. The focus has contributed to a significant increase in active listings, surpassing 8 million in the second quarter, driven by growth in various markets around the world.
Under Chesky, the company has expanded in under-penetrated markets, an important area of focus, with performance in these regions outpacing core markets in terms of gross nights booked. It is also important to note that Airbnb (NASDAQ:ABNB) exceeded expectations in the second quarter, generating $1 billion in free cash flow and reported revenue of $2.75 billion, an 11% year-over-year growth.
Polen Capital stated the following regarding Airbnb, Inc. (NASDAQ:ABNB) in its first quarter 2024 investor letter:
“During the quarter, we initiated new positions in Sage Group and Airbnb, Inc. (NASDAQ:ABNB) and added to our existing position in Globant.
Airbnb is a great business model, according to our research, due to its two-sided global network effects. For several reasons, Airbnb has a better mousetrap with its supply growth engine, with its hosts having a far lower cost of capital and more flexibility than hotels. We think private rentals should continue to grow their share of overall accommodation stays, potentially up to 30% of lodging or higher over the long term, letting the private rental gross booking value grow at a low double-digit rate. We also think Airbnb should continue to gain share within the private rental market as its global network effects strengthen, allowing for mid-teens revenue growth. With flat to rising margins over time, significant free cash flow generation, and a management team that has demonstrated its owner orientation, this should result in high-teens EPS growth over time. While the path there will not be linear, and it is a more discretionary spending-tied business, we think the long-term secular growth opportunity is very compelling.”
3. Starbucks Corporation (NASDAQ:SBUX)
Number of Hedge Fund Holders: 70
Starbucks Corporation (NASDAQ:SBUX) is a global leader in coffee roasting, marketing, and retailing. The company’s stores offer a wide variety of products, including coffee and tea beverages, whole and ground beans, single-serve options, ready-to-drink beverages, and an array of food items such as pastries, breakfast sandwiches, and lunch offerings.
Cramer is an SBUX bull because of the new CEO. Recently, Brian Niccol took the helm at the company. It was a transition from his successful tenure as CEO of Chipotle, where he played a crucial role in revitalizing the brand after a health crisis. Niccol’s expertise in marketing and store operations could be vital for navigating the current challenges the company faces.
Cramer highlighted the contrasting perspectives from analysts following a recent downgrade by Jefferies and an upgrade from Bernstein. On September 24, Jefferies downgraded the stock to Underperform from Hold with a price target of $76, down from $80. The analysts expressed concerns that its business recovery will require time and could incur significant costs, potentially impacting short-term earnings.
Conversely, on September 26, Bernstein upgraded Starbucks (NASDAQ:SBUX) to Outperform from Market Perform with a price target of $115 from $92. The analysts are optimistic about the company’s new leadership and believe that even without a complete turnaround, the stock could still perform well due to long-term growth potential.
“Like the bulls at Bernstein, I’m willing to look through a weak year if it means Starbucks can come out the other side much stronger, and I believe Brian Niccol can pull that off,” Cramer said.
During its fiscal Q3 earnings call, management emphasized a strong focus on improving operational execution across nearly 10,000 U.S. company-operated stores, viewing this as essential to the company’s immediate strategy.
Currently, the company operates 39,477 locations globally, with aspirations for significant expansion. By 2030, the company aims to increase its footprint to 55,000 stores and emphasizes growing its presence in China. Additionally, executives plan to expand in the U.S., increasing the number of stores from 16,730 to 20,000 over the long term.
In September, China’s central bank introduced a comprehensive set of measures designed to stimulate the struggling economy. Pan Gongsheng, the Governor of the People’s Bank of China (PBOC), revealed plans to reduce borrowing costs and give the green signal to banks to expand their lending activities.
He mentioned that the central bank would decrease the reserve requirements for banks. Additionally, measures aimed at revitalizing the troubled property market include lowering interest rates on existing mortgages and reducing the minimum down payment for all types of homes to 15%.
While highlighting that China is Starbucks’ (NASDAQ:SBUX) second-largest market, Cramer noted that these developments should lead to a stronger economy and improved business prospects for companies like Starbucks, which have significant exposure to China and have faced competition from lower-priced alternatives.
Diamond Hill Capital stated the following regarding Starbucks Corporation (NASDAQ:SBUX) in its Q2 2024 investor letter:
“Starbucks Corporation (NASDAQ:SBUX) is the global leader in the coffee industry. Given its significant scale, we believe Starbucks can maintain its average ticket growth and drive decent traffic growth, which should allow for some margin expansion. While macroeconomic and competitive pressures remain intense in China, the country accounts for a minimal percentage of today’s earnings, and we believe the current valuation embeds little to no contribution from China over the long term, which we view as too cynical. As the share price declined recently amid near-term concerns surrounding store sales in North America and China, we capitalized on what we considered an attractive entry point.”
2. GE Vernova Inc. (NYSE:GEV)
Number of Hedge Fund Holders: 92
In April, General Electric spun off into three parts, which led to the formation of GE Vernova Inc. (NYSE:GEV). While Cramer was initially worried about the company, he recently mentioned that it “turned out to be an incredible mover.”
GE Vernova Inc. (NYSE:GEV) is an energy company focused on providing a wide range of products and services related to electricity generation, transfer, orchestration, conversion, and storage. It operates across the United States, Europe, Asia, the Americas, the Middle East, and Africa.
The company represents the consolidation of General Electric’s power, wind, and electrification sectors, which include gas turbine equipment, onshore and offshore wind turbines, and technologies for grid distribution and power conversion.
Recently, GE Vernova (NYSE:GEV) reaffirmed its financial outlook for 2024. It is now projecting revenue to trend toward the upper range of $34 to $35 billion. The adjusted EBITDA margin is expected to be between 5% and 7%, and the company anticipates free cash flow to fall between $1.3 billion and $1.7 billion.
The outlook is supported by expected growth in the Power and Electrification segments, both of which are expected to reach the higher end of their EBITDA margin guidance. For the third quarter, the company still expects solid year-over-year organic revenue growth.
GE Vernova (NYSE:GEV) has plans for the Power segment and seeks to expand capacity to deliver 70 to 80 heavy-duty gas turbine units annually starting in 2026. It is a significant increase from the current average of about 55 shipments each year.
Given the growing demand for grid equipment, the company forecasts that its Electrification equipment backlog will more than triple by the end of 2024, compared to the $6.4 billion backlog reported at the end of 2022.
Carillon Tower Advisers stated the following regarding GE Vernova Inc. (NYSE:GEV) in its Q2 2024 investor letter:
“GE Vernova Inc. (NYSE:GEV) is a global electric power company that was recently spun out of a much larger industrial conglomerate. The company’s shares performed well in their first quarter as a standalone company, primarily as a result of the increasing outlook for power demand growth, both domestically and abroad. We believe GE Vernova is well positioned to capitalize on this growing trend across its various products and services, but most notably within its large-scale gas turbine equipment and related services, as well as in its high-voltage electrical transmission products.”
1. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 100
Cramer remains steadfast on Eli Lilly and Company (NYSE:LLY) as per Mad Money’s episode on September 30. Despite there being competitors, he believes that “you can’t really compete against a company with that amount of firepower.”
It is a prominent global pharmaceutical company dedicated to discovering, developing, and marketing medications that address significant health issues. The company is actively working to redefine diabetes care, tackle obesity and its severe long-term consequences, advance treatments for Alzheimer’s disease, and provide new approaches for challenging immune system disorders and different types of cancers.
The company has established a manufacturing presence with facilities in nine countries. Cramer highlighted that “what’s going to matter with Lilly is the moat it has by building these gigantic factories.”
In 2023, Eli Lilly (NYSE:LLY) announced a substantial investment of €2.3 billion to significantly expand its operations in Germany. The expansion is part of a larger plan to advance manufacturing capabilities, which has become a top priority for the management.
Earlier in May, it revealed an additional $5.3 billion investment in its manufacturing sites in Lebanon, Indiana, bringing the total investment there to an impressive $9 billion. Since 2020, the company has committed over $18 billion to build, upgrade, or acquire manufacturing facilities in both the U.S. and Europe.
Cramer also made note of the fact that the “stock climbed on overwhelming orders for GLP-1 drugs.” The expansion seeks to boost the production of essential ingredients for key products like Zepbound and Mounjaro.
The company launched Zepbound, a groundbreaking treatment for obesity that activates specific hormone receptors, marking a new approach in the market. Mounjaro, another innovative product, is the first approved medication for type 2 diabetes that targets these same receptors.
In the second quarter, Eli Lilly (NYSE:LLY) reported a remarkable 36% increase in revenue, largely driven by the success of Mounjaro, Zepbound, and Verzenio. The revenue from new products surged from $3.46 billion to $4.46 billion, which was owed to Mounjaro and Zepbound.
Baron Health Care Fund stated the following regarding Eli Lilly and Company (NYSE:LLY) in its Q2 2024 investor letter:
“Shares of global pharmaceutical company Eli Lilly and Company (NYSE:LLY) increased on continued investor enthusiasm around GLP-1 drugs for diabetes and obesity. We remain shareholders. Lilly’s Mounjaro/Zepbound not only offers superb blood sugar control for diabetics but can drive 20%-plus weight loss and likely improve cardiovascular outcomes in both diabetic and non-diabetic obese patients. Lilly is developing next generation drugs, including retatrutide, which drives approximately 25% weight loss, and orforglipron, a daily pill that produces approximately 15% weight loss. In the U.S. alone, there are 32 million Type 2 diabetics and an additional 105 million obese patients who we estimate would qualify for GLP-1 drugs. Although supply and access are limited near term, we think GLP-1 drugs will become standard of care for both diabetes and obesity and will become a $150 billion-plus category. We see Lilly setting a high efficacy bar and capturing significant long-term market share. We think the adoption of GLP-1s will drive Lilly to triple total revenue by 2030.”
While we acknowledge the potential of Eli Lilly and Company (NYSE:LLY) 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 LLY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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