On Monday, Jim Cramer, the host of Mad Money, analyzed the 10 largest stocks that suffered the most significant declines the previous week. He explained that examining the biggest losers can offer important insights into the current state of the market.
“Last Thursday and Friday were just brutal with the S&P plunging a combined 2.1%, Nasdaq [and] Dow both fell 2.7% as we got some soft economic data paired with some signs that the Fed, they weren’t that eager to make cuts.”
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Cramer emphasized that although the average decline was only 2-3% over the two-day selloff. However, focusing on individual stocks, the damage was much worse. He noted that growth stocks, which had been performing well, began to falter starting on Wednesday. Cramer then reviewed the largest pullbacks from the last three days of the week.
He explained that his analysis covered all components of the S&P 1500, specifically those with market capitalizations above $10 billion, ensuring a thorough and rigorous review. And when looking at these names collectively, Cramer noted that there is a lot to learn about the market dynamics. He went on to say:
“First for the hottest of the hot stocks without valuation support, they’re always vulnerable to sharp pullbacks usually it’s because of the bond market. Not this time.”
He added that when investors buy into momentum stocks, the gains can come quickly but just as easily disappear. Furthermore, he pointed out that many companies that were once considered solid performers are now reporting good earnings but offering disappointing guidance, which signals potential trouble ahead. He also noted that the less-than-truckload freight companies are suddenly out of favor, a sign of a weakening economy.
“Here’s the bottom line: At least in the eyes of Wall Street, the US economy’s looking quite a bit worse than it did just a month ago. Fortunately, it’s now a new week and even started off well with some decent gains for most stocks today, although there was a bit of collapse at the close. But we can always learn something from looking at the results of the tape and last week we got a real education from the momentum buyers trapped in the school of hard knocks.”
Jim Cramer on 10 Stocks With The Biggest Declines Last Week
Our Methodology
For this article, we compiled a list of 10 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on February 24. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the fourth quarter of 2024, which was taken from Insider Monkey’s database of over 1,000 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Jim Cramer on 10 Stocks With The Biggest Declines Last Week
10. XPO, Inc. (NYSE:XPO)
Number of Hedge Fund Holders: 44
XPO, Inc. (NYSE:XPO) was discussed during the episode. Here’s what Mad Money’s host had to say about the company:
“Hey, by the way, the ninth biggest loser, Old Dominion Freight Line, good company, and the 10th biggest loser XPO, also good, are in the the same less-than-truckload business. All three of these freight companies reported earlier in February, turning in okay results but they all got hit last week in response to an ugly quarter from competitor TFI International. And by the way, also FedEx was rumored to become more of a competitor in the industry. I don’t know about this group. When you throw in the softer macro data mentioned earlier, Wall Street just gave up on all these. The freight market’s been awful for years. Now we call it the freight recession, but if you’re waiting for bottom, you might wanna wait a little longer to get some confirmation [that] things are improving. I don’t see any improvement… As for the nine and 10, we’ll do the freight players I mentioned, that’s Old Dominion Freight Line and XPO. Both freight plays with less-than-truckload exposure like Saia. Now, and, and they both went down on negative pin action from the competitor and not necessarily from themselves.”
XPO (NYSE:XPO) offers freight transportation services, including less-than-truckload, truckload, brokerage, and multimodal solutions, along with managed transportation and warehousing across various regions.
9. Old Dominion Freight Line, Inc. (NASDAQ:ODFL)
Number of Hedge Fund Holders: 50
Cramer delved into Old Dominion Freight Line, Inc. (NASDAQ:ODFL) stock’s recent decline and the freight market’s weakness.
“Hey, by the way, the ninth biggest loser, Old Dominion Freight Line, good company, and the 10th biggest loser XPO, also good, are in the the same less-than-truckload business. All three of these freight companies reported earlier in February, turning in okay results but they all got hit last week in response to an ugly quarter from competitor TFI International. And by the way, also FedEx was rumored to become more of a competitor in the industry. I don’t know about this group. When you throw in the softer macro data mentioned earlier, Wall Street just gave up on all these. The freight market’s been awful for years. Now we call it the freight recession, but if you’re waiting for bottom, you might wanna wait a little longer to get some confirmation [that] things are improving. I don’t see any improvement… As for the nine and 10, we’ll do the freight players I mentioned, that’s Old Dominion Freight Line and XPO. Both freight plays with less-than-truckload exposure like Saia. Now, and, and they both went down on negative pin action from the competitor and not necessarily from themselves.”
Old Dominion Freight Line, Inc. (NASDAQ:ODFL) provides less-than-truckload and expedited transportation services, along with value-added solutions such as container drayage, truckload brokerage, and supply chain consulting.
Conestoga Capital Advisors stated the following regarding Old Dominion Freight Line, Inc. (NASDAQ:ODFL) in its Q4 2024 investor letter:
“Based in Thomasville, NC, Old Dominion Freight Line, Inc. (NASDAQ:ODFL) is one of the country’s largest less-than-truckload (LTL) carriers, an industry which has high barriers to entry. The company generated industry leading profit margins because of the durable competitive advantages it has created over decades including a balanced network and superior service. The freight industry is coming off a two plus year volume recession and we anticipate ODFL will resume its historical cadence of share gains in the next freight upcycle.”
8. Cadence Design Systems, Inc. (NASDAQ:CDNS)
Number of Hedge Fund Holders: 59
Cramer commented on Cadence Design Systems, Inc. (NASDAQ:CDNS) stock’s recent weakness and said:
“Finally, the eighth largest decline during the final three days of the last week was Cadence Design Systems. Wow, good company, software play that helps tech companies design semiconductors and electronics, including Nvidia. Cadence fell 14% during the three-day period. We were looking at it mostly on Wednesday after the current report, a solid quarter with conservative guidance. But the stock kept falling at the end of the week as more concerns about overbuilding for AI infrastructure emerged. Cadence is a, is fully a part of that theme.
So it continued to get hit, with the stock not, not far from the 52-week low now. It might actually be worth thinking about buying on weakness. Candidly, this weakness for Cadence could carry over to Nvidia when it reports on Wednesday. I’m just trying to keep you up on a stock that you may own.”
Cadence Design Systems (NASDAQ:CDNS) provides software, hardware, and services for integrated circuit design, specializing in functional verification and offering tools for digital IC design, synthesis, DFT, and physical implementation.
7. Hims & Hers Health, Inc. (NYSE:HIMS)
Number of Hedge Fund Holders: 38
Cramer discussed Hims & Hers Health, Inc.’s (NYSE:HIMS) upcoming challenge now that Ozempic’s shortage is over and said:
“Oh, next, boy, we’re really getting into them, Hims & Hers. Yeah, Hims & Hers Health tumbled 15.8% from Wednesday through Friday. In fact, every penny of that loss was from Friday’s 25% meltdown. Simple story here. This stock had been rallying up 184% year to date as, as of the middle of last week. You know, this is basically an online pharmacy and they’ve been offering cheaper versions of GLP-1 drugs from compounding pharmacies. Those are pharmacies that actually make drugs as opposed to just buying them. They’re allowed to ignore the patent because there’s a shortage of these lifesaving drugs.
But last Friday morning, the FDA announced that the shortage of Novo Nordisk’s Ozempic is over, which means the HIMS gravy train might be over too. Stock’s down big again in after-hours trading after the company reported mixed fourth-quarter results after the close tonight.”
Hims & Hers Health (NYSE:HIMS) provides a telehealth platform offering prescription and over-the-counter health and wellness products, including medication, skincare, sexual health, hair care, and wellness items, along with ongoing support from licensed healthcare professionals.
6. Sprouts Farmers Market, Inc. (NASDAQ:SFM)
Number of Hedge Fund Holders: 47
Discussing Sprouts Farmers Market, Inc. (NASDAQ:SFM) during the episode, Cramer said:
“The sixth biggest loser from Wednesday through Friday, one that we love, Sprouts Farmers Market. It fell 16.4% during that period. Most of the company, most of that coming after the company reported on Thursday night that bizarrely, Sprouts reported really strong numbers. This was a great quarter and all the analysts raised their estimates. Yet the stock rolled over anyway. Why? I saw someone complain that October was the best month of the quarter… The company’s full-year same-store sales forecast was much lower than its first-quarter same-store sales forecast, which suggests that growth will continue slowing throughout the year. But honestly, what really did it, I’ll tell you what did it, Sprout stock was up 220% in the 12 months before this quarter and I think this is another momentum stock that simply got too hot to handle at the last moment. And maybe it’s gonna stay that way.”
Sprouts Farmers Market (NASDAQ:SFM) is a U.S.-based retailer specializing in fresh, natural, and organic food products, providing a variety of both perishable and non-perishable items under the Sprouts brand.
5. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 63
Cramer highlighted that the reason behind Palantir Technologies Inc. (NASDAQ:PLTR) stock’s recent weakness was more simple than the headlines were making it out to be and stated:
“Fifth largest decline, well, from the aforementioned Palantir Technologies, which fell 18.7% during the three-day period, and then plunged another 10.5% today. While there was some relevant news here, headlines about budget cuts from the Pentagon, insider selling chatter, resignation of the chief accounting officer, I don’t think that explains the weakness. Palantir got crushed because it was the hottest stock in the entire market, traded up to extreme valuation via a parabolic move. They never, those don’t last, trust me. And then Wall Street gave up on momentum so Palantir came right back down. I like the company stock, but the company, but you know what? The stock’s so expensive and frankly, I gotta tell you, I think it’s gotten a lot of some real bearish adherence in the last few days.”
Palantir (NASDAQ:PLTR) develops software platforms for complex data integration and decision-making, offering products like Gotham, Foundry, Apollo, and its AI Platform to help organizations manage and analyze large datasets.
4. Saia, Inc. (NASDAQ:SAIA)
Number of Hedge Fund Holders: 31
Including Saia, Inc. (NASDAQ:SAIA) stock in the list of biggest losers of last week, Cramer said:
“The fourth largest loser is a company called Saia, which operates in the less-than-truckload, LTL is what they call it, freight market. This stock fell 19.5% in the final three days of the week… All three of these freight companies reported earlier in February, turning in okay results but they all got hit last week in response to an ugly quarter from competitor TFI International. And by the way, also FedEx was rumored to become more of a competitor in the industry.
I don’t know about this group. When you throw in the softer macro data mentioned earlier, Wall Street just gave up on all these. The freight market’s been awful for years. Now we call it the freight recession, but if you’re waiting for bottom, you might wanna wait a little longer to get some confirmation [that] things are improving. I don’t see any improvement.”
Saia (NASDAQ:SAIA) is a transportation company offering less-than-truckload services along with value-added solutions such as non-asset truckload, expedited, and logistics services.
3. EPAM Systems, Inc. (NYSE:EPAM)
Number of Hedge Fund Holders: 56
While discussing EPAM Systems, Inc. (NYSE:EPAM) stock’s recent decline, Cramer mentioned its presence in Ukraine and the recently announced poor guidance by the company.
“There was EPAM, EPAM Systems. That’s an enterprise software company for platform engineering and development. I don’t follow this company all that closely, but I do know that EPAM has a major presence in Ukraine and the Trump administration seemingly wants to pull the plug on assistance to the Ukraine. I thought that was why the stock punched 20% in the last three days of the week but there’s more to it because EPAM reported on Thursday morning and the guidance was absolutely miserable.”
EPAM Systems (NYSE:EPAM) provides services in digital platform engineering, software development, and infrastructure management, alongside consulting, design solutions, and specialization in emerging technologies such as AI, robotics, and virtual reality. When Cramer discussed stocks that could do well in December 2024, he commented:
“Next is EPAM Systems, which is an enterprise software company for platform engineering development. Now the stock’s come roaring back leading, it is part of the return of the enterprise software primacy over hardware. EPAM’s strength is a green light to buy Salesforce and ServiceNow, the two biggest enterprise software plays that I like.”
2. Akamai Technologies, Inc. (NASDAQ:AKAM)
Number of Hedge Fund Holders: 37
Akamai Technologies, Inc. (NASDAQ:AKAM) was mentioned during the episode, and here’s what Cramer had to say:
“Second is one that, it kind of took your breath away, which is Akamai Technologies, because… its experience, it’s a longstanding company, it fell 22.7% from Wednesday through Friday. Now this is a content delivery network that’s, like I tell you, it’s like the fast lane on the information highway. Akamai reported on Thursday evening and while the results were fine, well you know what matters more?
The guidance and the guidance was awful. Three analysts downgraded the stock on Friday and with good reason. Growth is slowing, margins are coming down, and Akamai needs to spend a lot of money to maintain its network. No, thank you.”
Akamai (NASDAQ:AKAM) provides cloud computing, security, and content delivery services, offering solutions to protect against cyberattacks, improve performance, and support web and mobile applications. Its services include media delivery, data analytics, and a range of cloud-based tools to help customers deploy and secure applications and workloads.
1. Axon Enterprise, Inc. (NASDAQ:AXON)
Number of Hedge Fund Holders: 64
Cramer noted Axon Enterprise, Inc.’s (NASDAQ:AXON) remarkable performance over time, despite its recent decline. Formerly known as TASER, the company experienced a significant drop of almost 28% within just three days. Cramer pointed out the company’s impressive track record of success in previous years. He added:
“It pivoted… to police body cameras, evidence management software Those were good businesses. So why then did the stock just get completely obliterated? Weirdly, there really wasn’t any bad news from the company. Instead, it was a one-two punch of downgrades from analysts at boutique research firms that failed Axon. The first from Northcoast caused the stock to sink more than 16% last Wednesday before another downgrade from Craig-Hallum caused it to fall over 8% on Thursday.
The stock fell another 5% on Friday when the market-wide selling really got going. Now Axon reports tomorrow after the close, but clearly, people wanted to ring the register going into the quarter and the bearish analysts gave them a real excuse to do so. Very different attitude from what we’ve seen in the past few months, huh, where momentum stocks are frankly unstoppable.”
Axon (NASDAQ:AXON) is a company specializing in the development of TASER devices and offering both hardware and cloud-based software solutions to assist law enforcement in capturing, storing, managing, and analyzing digital evidence.
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Disclosure: None. This article was originally published at Insider Monkey.
