We recently published a list of Jim Cramer is Talking About These 10 Stocks as Markets Rebound. Since Bank of Montreal (NYSE:BMO) ranks 10th on the list, it deserves a deeper look.
Jim Cramer in his latest program on CNBC talked about the latest rebound in the markets followed by a major selloff last week, saying we can “fret” about the interest rates, jobs market or mortgage rates, or we can just buy the stocks of “tremendous” companies and hold on to them.
“Stock prices have become so dependent on the macro, the carry trade, the Fed chatter, that it’s impossible to give you a pat answer even as I’ve told you over and over again that corporate America is doing much better than anyone would expect at this point in the cycle,” Cramer said.
Cramer lamented yet again that people believe a 25bps decline in interest rates could somehow “motivate” people to increase spending and on these hopes they often buy “phony” ETFs.
Cramer also said that the Fed won’t begin to cut rates until it sees consumers “rebelling” against higher prices forcing companies to roll back price increases to pre-COVID levels. Jim Cramer believes we now have an “empowered consumer” who is willing to make choices and choose options that are cheaper and better.” He said that during the pandemic, amid higher liquidity, people were willing to accept higher prices, but not anymore.
For this article we watched several latest programs of Jim Cramer and picked 10 stocks he’s talking about. 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).
Top 20 Countries that Owe the US Money
Bank of Montreal (NYSE:BMO)
Number of Hedge Fund Investors: 13
When asked about Bank of Montreal in a latest program, Jim Cramer said that it’s a “very, very good bank.”
“I don’t understand why it’s priced so cheaply,” Cramer added.
He said that he’d be a buyer of the stock “right here.”
Last month, RBC downgraded the stock to “Sector Perform” from “Outperform” and cut EPS estimates following a review of BMO’s credit results. Analysts at RBC said even after adjusting for unusual losses, the company’s credit quality is worsening faster than its U.S. peers, despite a similar loan mix and possibly more credit protection.
BMO has been under pressure amid increasing recession fears in Canada. As of the end of the June quarter the company’s profit margins are low when compared to other top banks in the country. However, its over 5% dividend yield is attractive. Investors will be closely watching the company’s latest earnings results scheduled to be out near the end of this month.
Overall, Bank of Montreal (NYSE:BMO) ranks 10th on Insider Monkey’s list titled Jim Cramer is Talking About These 10 Stocks as Markets Rebound. While we acknowledge the potential of Bank of Montreal (NYSE:BMO), 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 BMO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
