We recently compiled a list of the Jim Cramer’s Game Plan: 23 Stocks to Watch. In this article, we are going to take a look at where Deckers Outdoor Corporation (NYSE:DECK) stands against the other stocks to watch according to Jim Cramer.
As Wall Street dives into the heart of earnings season, Jim Cramer has provided insights into market trends and earnings reports to watch in the upcoming week. Cramer remarked,
“It’s hard to believe, but this market’s now been up for six straight weeks. That’s right, despite interest rates running higher since mid-September, despite being on the verge of an election where both candidates want to pile on trillions of dollars of debt to an already unfathomable amount of borrowing, this market seems like it can’t help itself from going higher.”
Cramer highlighted the influence of the Federal Reserve, noting that ever since the rate cut on September 18, the market has largely trended upward. He emphasized that it is not solely the Fed driving this bullish sentiment, the earnings season has brought some remarkable quarterly results. With strong performance from banks kicking off the earnings cycle, Cramer posed the question of whether the rally could extend into a seventh consecutive week, suggesting following his game plan to assess this possibility.
On a separate note, addressing economic indicators, Cramer warned that if the economy continues to produce solid numbers, the likelihood of substantial rate cuts will diminish. While he believes that rates will eventually decline, he cautioned those shorting Treasurys, suggesting that they may be making a mistake.
Cramer noted a significant caveat, which is the upcoming election, and pointed out that both candidates are advocating potentially inflationary policies.
“Both candidates have pushed potentially inflationary policies. As I said at the top, if Trump can win enough of a majority to pass his huge tariffs, or Harris expands housing tax credits and de facto subsidy, they could push home prices higher. Then inflation might stage a comeback. But I’m not betting on that. I think both parties are terrified of being blamed for inflation, which almost single-handedly sunk Joe Biden’s presidency. No matter what the candidates campaign on, I don’t see their allies in Congress taking any chances with inflation beyond the usual unwillingness to balance the budget.”
He concluded that those betting against Treasurys have overreached, suggesting that their efforts to counter the Fed’s policies are unlikely to end well. Cramer observed that when a large number of investors align on one side of a trade, as seen currently, that group often ends up being incorrect.
Our Methodology
For this article, we compiled a list of 23 stocks that were discussed by Jim Cramer during his episode of Mad Money on October 18. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 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).
A customer browsing a retail store, finding the perfect footwear for their casual outfits.
Deckers Outdoor Corporation (NYSE:DECK)
Number of Hedge Fund Holders: 52
Cramer recently commented on Deckers Outdoor Corporation (NYSE:DECK) and said:
“We keep wondering how Hoka is doing and whether it’s still taking share from Nike. Hoka is a division of Deckers Outdoor, which reports after the close on Thursday. I anticipate a strong number for their insurgent running shoe division.”
Deckers Outdoor (NYSE:DECK) designs, markets, and distributes a wide variety of footwear, apparel, and accessories. The company’s product offerings include premium items under the UGG brand, performance gear tailored for athletes through HOKA, and casual footwear and sandals from brands such as Teva, Sanuk, Koolaburra, and AHNU. Among its brands, HOKA, which was acquired in 2012 for around $1.1 million, has emerged as a particularly significant asset.
The acquisition has proven highly successful, with HOKA projected to generate over $2 billion in sales, a goal articulated by Deckers’ CEO and President, Dave Powers last year. In the first quarter of fiscal 2025, which ended June 30, the company reported a 22% increase in revenue, driven primarily by HOKA, whose net sales rose by 29.7% to $545.2 million, up from $420.5 million. EPS for the quarter reached $4.52, an impressive 88% increase, attributed to a higher gross margin resulting from a favorable sales mix skewed toward HOKA’s premium-priced shoes.
For the full year, Deckers Outdoor (NYSE:DECK) forecasts net sales of approximately $4.7 billion, representing a 10% rise from the prior year, with projected earnings per share growth between 2% and 5%. Supporting these fundamentals is a strong balance sheet, featuring $1.4 billion in cash and no financial debt.
Overall DECK ranks 12th on Jim Cramer’s list of stocks to watch. While we acknowledge the potential of DECK 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 DECK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
