We recently compiled a list of the 9 Stocks on Jim Cramer’s Radar. In this article, we are going to take a look at where Abbott Laboratories (NYSE:ABT) stands against the other stocks on Jim Cramer’s radar.
Jim Cramer, host of Mad Money, recently emphasized the importance of long-term investing, urging investors to focus on the growth prospects of certain pharmaceutical stocks while also answering callers’ questions about certain stocks. Cramer acknowledged that stocks often experience cyclical trends, with some sectors falling out of favor temporarily.
“Look, stocks go in and out of style in the Wall Street fashion show. Whole sectors wallow at times. Right now, healthcare’s in some sort of doghouse the likes of which I’ve never seen.”
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Despite the industry’s struggles, Cramer reflected on his observations at the JPMorgan healthcare conference in San Francisco, where he saw many pharmaceutical companies that he believes are not being properly valued by Wall Street. While the present outlook for these companies may not be particularly stellar, he highlighted the strong and lucrative long-term potential they offer.
“Why am I so willing to focus on the so-called out years? Because the long-term possibilities for these companies, frankly, they’re incredible and by the way, incredibly lucrative too, even as the present is good, but not great.”
He pointed to the ongoing progress in the healthcare sector, particularly with GLP-1 drugs, which have the potential to treat more conditions beyond diabetes and weight loss. Additionally, companies are working on developing oral versions of these treatments, which could offer patients more convenient options. Beyond GLP-1 drugs, healthcare companies are expanding their portfolios with new cancer therapies, treatments for eye care and asthma, and experimental drugs for COVID-19.
“The bottom line: Ask yourself what happens if things get better, please. What if the future is brighter than the past? If that’s the case, and I think it is, then you’ll have a lot of winners with these drug and medical device plays.”
Our Methodology
For this article, we compiled a list of 9 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on January 14. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 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).
An operating room with a doctor monitoring a patient’s vital signs during surgery with a medical device.
Abbott Laboratories (NYSE:ABT)
Number of Hedge Fund Holders: 63
Commenting on Abbott Laboratories’ (NYSE:ABT) ongoing litigation, Cramer remarked that the company will win the cases.
“I still can’t believe that Abbott Labs, perhaps the most diversified healthcare company in the world with some of the greatest growth franchises, has a series of lawsuits hanging over its head, crimping its price-to-earnings-multiple. I think Abbott will win these baby formula cases. Yet, who wants that overhang, right? Certainly not Wall Street. So what does this stock do? It languishes. Who knows how quickly things can change though.”
Abbott Laboratories (NYSE:ABT) is a global healthcare company that focuses on discovering, developing, manufacturing, and selling a wide range of healthcare products. The company has been facing legal challenges related to its infant formula, with over a thousand claims alleging that the product causes necrotizing enterocolitis, a severe intestinal condition.
In July, Abbott Laboratories (NYSE:ABT) was required to pay $495 million in damages after losing the first trial brought by a plaintiff. However, the company received some relief in November 2024 when the jury in its second trial ruled in its favor, finding Abbott not liable in that case. Following this, Cramer said:
“Several analysts wrote about the ruling overnight, and the overall consensus is that this outcome strengthens Abbott’s position in future NEC cases and also puts Abbott in a much better position for a possible settlement for the remaining claims.”
Overall ABT ranks 3rd on our list of the stocks on Jim Cramer’s radar. While we acknowledge the potential of ABT 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 ABT 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.
