In this article, we discuss the 8 value stocks that Jim Cramer is warning about. If you want to read about some more value stocks that Jim Cramer is warning about, go directly to Jim Cramer is Warning About These 4 Value Stocks.
As inflation numbers continue to add to the concerns around economic growth in the United States, Jim Cramer, the former hedge fund manager and host of Mad Money on CNBC, has turned his attention towards the zoomer generation, commonly referred to as Generation Z or those who are aged between 18 and 24 years-old, to underline that even though the young adults poised to enter the stock market face financial challenges, they still “spend a significant portion of what they earn on discretionary purchases”.
Cramer believes that “younger people have to learn to be more frugal” and advised the younger generation to put some “discretionary spending into investments every month”. Cramer added that stocks have proven to be an “invaluable investment” over time. Urging young people to turn their attention towards the stock market, Cramer claimed that “people have a million excuses why they do not want to get rich”. The comments come at an interesting time, as rising rates have pummeled the stock market and all major indexes are trading in the red.
Some of the stocks that Cramer is keeping a close eye on as recession fears mount include Uber Technologies, Inc. (NYSE:UBER), Adobe Inc. (NASDAQ:ADBE), and Citigroup Inc. (NYSE:C). In addition to valuable advice about investing priorities, Cramer has also warned his followers, a lot of whom fall in the zoomer range, that even “high-quality low price-to-earnings stocks could get beaten down by a recession”. He has said there are only a “select few stocks that truly have something good going on”.
Our Methodology
These were picked keeping in mind the latest calls that Cramer made on these equities on his Mad Money show aired by news platform CNBC. Only firms that have a PE Ratio of less than 15 were selected for the list. An extensive database of around 900 elite hedge funds tracked by Insider Monkey in the first quarter of 2022 was used to identify the popularity of each stock among hedge funds.
Jim Cramer is Warning About These Value Stocks
8. Bridge Investment Group Holdings Inc. (NYSE:BRDG)
Number of Hedge Fund Holders: 13
PE Ratio: 3.21
Bridge Investment Group Holdings Inc. (NYSE:BRDG) is a Utah-based investment firm that manages capital. Cramer has been bearish on the stock since early June. During the Lightning Round of his show on June 7, the journalist investor, while responding to a viewer question about the outlook on the firm, said that he was still unsure what the company actually did. He also added that there was lots of room for error with the stock, and in the present market environment, this was not the best idea.
On April 12, Citi analyst William Katz maintained a Buy rating on Bridge Investment Group Holdings Inc. (NYSE:BRDG) stock and lowered the price target to $24 from $25. The analyst lowered the earnings targets for the sector overall through 2024.
At the end of the first quarter of 2022, 13 hedge funds in the database of Insider Monkey held stakes worth $25 million in Bridge Investment Group Holdings Inc. (NYSE:BRDG), up from 12 in the previous quarter worth $34 million. Among the hedge funds being tracked by Insider Monkey, California-based investment firm Phase 2 Partners is a leading shareholder in Bridge Investment Group Holdings Inc. (NYSE:BRDG), with 375,178 shares worth more than $7.6 million.
Just like Uber Technologies, Inc. (NYSE:UBER), Adobe Inc. (NASDAQ:ADBE), and Citigroup Inc. (NYSE:C), Bridge Investment Group Holdings Inc. (NYSE:BRDG) is one of the stocks that elite investors are monitoring.
7. Annaly Capital Management, Inc. (NYSE:NLY)
Number of Hedge Fund Holders: 14
PE Ratio: 3.55
Annaly Capital Management, Inc. (NYSE:NLY) operates as a diversified capital manager. On June 8, during the Lightning Round of his show, Jim Cramer presented an overall bearish outlook on the company. While answering a question about his views on the firm, the former hedge fund manager was of the opinion that even though the dividend of the company was safe from the present volatility, he was not going to recommend the stock because he believed it did not have room for capital appreciation.
On June 28, Piper Sandler analyst Kevin Barker maintained a Neutral rating on Annaly Capital Management, Inc. (NYSE:NLY) stock and lowered the price target to $6 from $6.5, noting that mortgage banking earnings were under pressure in the second quarter of 2022.
At the end of the first quarter of 2022, 14 hedge funds in the database of Insider Monkey held stakes worth $72 million in Annaly Capital Management, Inc. (NYSE:NLY), compared to 21 the preceding quarter worth $63 million. Among the hedge funds being tracked by Insider Monkey, UK-based investment firm Marshall Wace LLP is a leading shareholder in Annaly Capital Management, Inc. (NYSE:NLY), with 4.9 million shares worth more than $34 million.
6. Nucor Corporation (NYSE:NUE)
Number of Hedge Fund Holders: 22
PE Ratio: 3.85
Nucor Corporation (NYSE:NUE) makes and sells steel products. During his show on June 15, the former Goldman Sachs employee highlighted Nucor among a group of companies with low price-to-earnings multiples that could be “great bets if the economy stays stable” but also warned that as these stocks had toppled during the pandemic, the same could happen again if the economy does not recover. Cramer noted that if the economy stumbled further, Nucor could go “much lower” and “investors should keep that in mind”.
On June 14, investment advisory JPMorgan maintained a Neutral rating on Nucor Corporation (NYSE:NUE) stock and lowered the price target to $125 from $146. Analyst Michael Glick issued the ratings update.
At the end of the first quarter of 2022, 22 hedge funds in the database of Insider Monkey held stakes worth $260 million in Nucor Corporation (NYSE:NUE), compared to 26 in the preceding quarter worth $186 million. Among the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm AQR Capital Management is a leading shareholder in Nucor Corporation (NYSE:NUE), with 929,805 shares worth more than $138 million.
In its Q3 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Nucor Corporation (NYSE:NUE) was one of them. Here is what the fund said:
“Our active approach also applies to being disciplined in managing positions in companies in more cyclical industries and taking profits during stronger periods of each cycle. We closed a position in steel maker Nucor Corporation (NYSE:NUE) during the quarter after the shares had more than doubled over the last year as a direct participant in the recovery of the U.S. economy and rebound in industrial activity. At this point in the cycle, we no longer view the risk/reward as compelling and feel more confident in deploying the proceeds in more attractive areas discussed in this and previous letters.”
5. Allegiant Travel Company (NASDAQ:ALGT)
Number of Hedge Fund Holders: 24
PE Ratio: 15.14
Allegiant Travel Company (NASDAQ:ALGT) is a Nevada-based leisure travel company. Cramer has a bearish outlook on the stock. In early June, during the Lightning Round of his show, the former hedge fund manager highlighted his bullish views on established travel firms like Expedia and Airbnb, comparing them favorably against Allegiant in response to a viewer question about the Nevada-based firm.
On June 27, Evercore ISI analyst Duane Pfennigwerth maintained an In Line rating on Allegiant Travel Company (NASDAQ:ALGT) stock and lowered the price target to $150 from $175, noting that refining margins for airliners were climbing and earnings estimates had to be adjusted.
At the end of the first quarter of 2022, 24 hedge funds in the database of Insider Monkey held stakes worth $230 million in Allegiant Travel Company (NASDAQ:ALGT), the same as in the previous quarter worth $293 million. Among the hedge funds being tracked by Insider Monkey, Ohio-based investment firm Diamond Hill Capital is a leading shareholder in Allegiant Travel Company (NASDAQ:ALGT), with 494,380 shares worth more than $80 million.
Along with Uber Technologies, Inc. (NYSE:UBER), Adobe Inc. (NASDAQ:ADBE), and Citigroup Inc. (NYSE:C), Allegiant Travel Company (NASDAQ:ALGT) is one of the stocks that hedge funds have their eye on.
In its Q2 2021 investor letter, Wasatch Global Investors, an asset management firm, highlighted a few stocks and Allegiant Travel Company (NASDAQ:ALGT) was one of them. Here is what the fund said:
“Allegiant Travel Company (NASDAQ:ALGT) was also a large detractor. Allegiant offers airline flights, hotel bookings, car rentals, travel management and other related services. When the stock price declined in 2020, we performed more research on the company. Although other travel-related competitors were facing dire circumstances, Allegiant wasn’t forced to raise dilutive equity or take government money. Since then, Allegiant has strengthened its relationships with pilots and crews and has positioned itself to benefit from leisure travel—which should accelerate sooner than business travel. Although we didn’t purchase the company as a way to take advantage of the economic reopening, the stock did get a boost from economy-related optimism in the first quarter. During the second quarter, the stock simply gave back some of its gains but we still like the company’s fundamentals from a risk/reward perspective.”
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Disclosure. None. Jim Cramer Is Warning About These 8 Value Stocks is originally published on Insider Monkey.
