In this article, we will take a detailed look at Jim Cramer Latest Portfolio: 10 Stocks to Buy and Sell.
Jim Cramer in his latest program talked about how the China factor is affecting US stocks. He said that companies that have exposure to China are getting hammered and he does not see that changing “anytime soon.”
Cramer said that currently there are many “pernicious forces working against the bulls.” The CNBC host said many growth stocks are declining right when interest rates are around the corner. He said that companies that don’t benefit from rate cuts are going down. Cramer also mentioned weak earnings reports which show companies having challenged client bases. Cramer mentioned a consumer products company that was recently hammered because of weakness in China.
Cramer thinks the problem in China is twofold: there’s a government that does not like America or American businesses while the population is “cash-strapped” even if they “like our country.”
Cramer said “China is so darn complicated.” He said at one point the Chinese government was “so business friendly” that Western companies thought it’s “insane” not to go there. But since the Trump administration, the country has been engaged in trade wars with the US.
Cramer said the Chinese government “took advantage of us on trade.”
For this article we watched several latest programs of Jim Cramer and picked 10 important stocks he’s talking about. With each stock 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. Dream Finders Homes Inc (NYSE:DFH)
Number of Hedge Fund Investors: 14
Jim Cramer was recently asked about Dream Finders Homes. He said that he “likes the business very much” and people don’t know much about the company.
Homebuilding company Dream Finders Homes Inc (NYSE:DFH) is poised to benefit from the expected rise in home construction activity in the US amid a severe shortage of homes. According to a report from Zillow, the US is short on over 4.5 million homes. While the industry has seen headwinds amid rising rates, in the long term, secular growth catalysts are intact. Dream Finders Homes Inc (NYSE:DFH) net income surged from $121.6 million to $295.9 million over the past three years.
Operating cash flow increased nearly sixfold from $65 million to $374.2 million, while adjusted operating cash flow more than doubled from $160 million to $350.5 million. EBITDA also expanded from $200.2 million to $535.6 million. The cancellation rate of house orders is also inching lower. The cancellation rate, which had surged from 12.2% in 2021 to 21.5% in 2022, fell to 18.3% in 2023.
This year Dream Finders Homes Inc (NYSE:DFH) expects to close 8,250 properties, a 12.8% increase from 2023. This growth would be driven by net new orders and the acquisition of Crescent Homes which the company bought for $185 million.
9. Torm PLC (NASDAQ:TRMD)
Number of Hedge Fund Investors: 16
Jim Cramer was recently asked about Torm plc during a program on CNBC. Here is what he said:
“It has a remarkably high dividend yield. And as long as it has that dividend yield, the stock’s going to stay up. But, when things start going bad, and they always do in this business, that yield’s going to start going down…Be aware, right now, still going up. But these things are slopes, and they just get crushed when that dividend goes down, yield will go down with it.”
Torm PLC (NASDAQ:TRMD) is a shipping company that operates tankers for oil products such as gasoline, jet fuel, naphtha and diesel oil. Torm PLC (NASDAQ:TRMD) is set to benefit in the short term amid a rise in refinery capacity in the Middle East and Africa. Middle East refinery production is estimated to rise 10-15% from the end of 2023, adding over 1 million barrels per day as newly completed refineries ramp up. Torm PLC (NASDAQ:TRMD) is also implementing its strategy of vessel upgrades and expansion. It bought eight medium-range tankers, aged 9-10 years, for $238 million in cash and 2.65 million in company stock. The company also divested an 18-year-old MR tanker for $23.3 million, increasing its fleet to 96 vessels. Torm PLC (NASDAQ:TRMD) bulls believe the company’s 15% dividend yield is safe for the next two years at least amid rising refinery volumes in the Middle East and Africa.
8. Toyota Motor Corp (NYSE:TM)
Number of Hedge Fund Investors: 17
A caller recently asked Jim Cramer about his thoughts on Toyota Motors. Cramer recommended investors to stay away from Toyota and auto stocks in general.
While Toyota Motor Corp (NYSE:TM) shares have gained about 14% over the past one year, analysts are turning bearish on the stock, mostly due to a lack of EV strategy. Instead, the company seems to be doubling down on ICE and traditional cars, which shows the management may be resisting the global shift towards EV which is inevitable. Toyota Motor Corp (NYSE:TM) Chairman Akio Toyoda in a recent statement pitched making better engines to reduce carbon emissions and the company published its strategy in a release entitled “The Engine Reborn.” Analysts took it as a horse cart company pledging to make better horse carts at a time when engine-based cars were starting to appear on the road. This strategic flaw is reflected in the numbers too. Toyota Motor Corp (NYSE:TM) Corolla has lost its title of the most popular car to Tesla Model Y. The company was also in the news amid a safety scandal allegedly involving cheating on certification tests for seven vehicle models.
Toyota Motor Corp (NYSE:TM) overall outlook is also soft. For fiscal Toyota expects to sell 9.5 million units, down from 11.09 million in FY 2024.
7. AeroVironment, Inc. (NASDAQ:AVAV)
Number of Hedge Fund Investors: 20
When asked about AVAV during a latest program, Cramer said people keep telling him the stock is “way too expensive and it has to come down versus the price of Iranian drones.”
“All I know is their drones work and therefore it’s a buy.”
AeroVironment, Inc. (NASDAQ:AVAV) is a defense contractor that makes unmanned aerial vehicles. AVAV shares are up about 41% so far this year, thanks to geopolitical tensions worldwide that have caused the company to double its sales from 2020 to 2024 to nearly $750 million. The company has three business segments: Loitering Munitions (LMS), Uncrewed Systems (UxS), and MacCready Works (MW). While competition is rising in the industry, AeroVironment, Inc. (NASDAQ:AVAV) moat is strong because of its strong R&D spending in innovation that has made its drone reliable. Governments need reliability as compromised data links, unreliable GPS systems could result in destructive defeat for militaries.
Despite the latest pullback in share price following a softer fiscal Q4 earnings report and rival Anduril Industries winning a $300 million contract from the US government, AeroVironment, Inc. (NASDAQ:AVAV) trades at around 50x forward earnings. This valuation is not outlandishly high amid the growth prospects of the AV industry and about a 19% revenue growth estimate set by Wall Street for the company for 2025.
6. SAP SE (NYSE:SAP)
Number of Hedge Fund Investors: 24
Jim Cramer said in a latest program that SAP stock is “incredible.”
“I think SAP is not done going higher.”
SAP SE (NYSE:SAP) is in the news after posting solid Q2 results. Revenue jumped 10% while EBIT exceeded expectations, reaching EUR 1.94 billion, 7% above consensus. Free cash flow came in at EUR 1.3 billion.
The results show that the S/4 HANA migration cycle is bearing fruit and the long-term outlook is also positive.
Ave Maria World Equity Fund talked about this business transition in its first quarter 2024 investor letter:
“SAP SE (NYSE:SAP) provides enterprise application software products worldwide. SAP is successfully transitioning from a perpetual license model to a SAAS model, which we believe will lead to an increase in TAM (total addressable market), higher margins and lower capital intensity.”
SAP SE (NYSE:SAP) restructuring efforts are showing results. In fiscal Q4 its EBIT margin came in at 23.4%, compared with 19.1% in Q2 2023. The company has increased its restructuring provision to EUR 3 billion from the previous EUR 2.2 billion.
The biggest growth catalyst for SAP is AI. AI is now a central part of SAP SE (NYSE:SAP) cloud offerings. About 20% of all deals now include premium AI features, and all ERP and line of business deals had AI in the conversion. SAP SE (NYSE:SAP) talked about the role AI is playing in its business during the latest earnings call:
“Every ERP and LOB deal we closed, our AI strategy played a key role, and AI had a direct impact on our bookings. In the second quarter, almost 20% of all deals included premium AI use cases. And this is just the beginning. Customers have clear plans to expand their AI consumption on their RISE and GROW transformation journeys.
Let me give you some quick updates on our key items in Business AI. Joule is quickly becoming our new user experience, our one front end. We are making our AI copilot an incredible productivity engine for the 300 million people worldwide using our cloud software.”
Read the full earnings call transcript here.
5. Reddit Inc (NYSE:RDDT)
Number of Hedge Fund Investors: 31
Jim Cramer in a latest program said Reddit is one of the “new companies” investors should be “in” because of their “advertising dollars.”
With over 80 million daily active users, Reddit Inc (NYSE:RDDT) remains one of the fastest-growing social media platforms in the world. While Facebook and Twitter show signs of maturing growth, Reddit Inc (NYSE:RDDT) still has huge upside potential as more and more people flock to Reddit discussion boards for authentic opinions and discussion. User input from millions of people on various topics freely accessible to anyone is Reddit Inc (NYSE:RDDT)’s moat. As of 2023, users posted 16 billion comments on the platform, according to the company. That’s why companies are flocking to pay money to Reddit to use its data to train their AI models. Reddit Inc (NYSE:RDDT) has licensing agreement with Alphabet Inc.’s Google worth $60 million to help train large language models. Reddit Inc (NYSE:RDDT) has signed licensing agreements totaling $203 million, with terms lasting two to three years. The company generated approximately $20 million from AI content deals last quarter and expects to exceed $60 million by year-end. Reddit Inc (NYSE:RDDT) has signed licensing agreements totaling $203 million, with terms lasting two to three years.
During the first quarter Reddit Inc (NYSE:RDDT) revenue soared 40% year over year. Wall Street expects the company’s fiscal 2025 revenue to rise 21% on a YoY basis. Daily active users in the first quarter jumped 37% y/y.