We recently compiled a list titled Jim Cramer’s Ultimate Stock Picks: 10 Hot Stocks to Consider. In this article, we will look at where Ge Vernova Inc. (NYSE:GEV) ranks among Jim Cramer’s 10 hot stocks to consider.
In a recent episode of Mad Money, Jim Cramer emphasized the unexpected strength in the market, pointing out that many companies are doing better than Wall Street realizes. He suggests that investors should stop second-guessing these companies every time negative news surfaces. Cramer praises the excellent management and execution by CEOs, which he feels often goes unappreciated.
“Suddenly, all is forgiven, or if not all, then at least most. I’m talking about the incredible resilience in this market, buoyed by a recognition that many companies are simply better than Wall Street gives them credit for. We need to stop turning against them every time there’s a seemingly bad data point. Every day I come to work, I’m dazzled by the resourcefulness of executives who do their best to create value for you, the shareholder. Lots of stocks went up on days like today when the Dow advanced 335 points, the S&P gained 75%, and the NASDAQ jumped 1.0%, all thanks to good management and excellent execution that often goes unnoticed.”
Jim Cramer acknowledges that while some CEOs might warrant skepticism, many are truly exceptional and deserve more recognition for their efforts. He criticizes the overemphasis on short-term economic indicators, arguing that great companies stay focused and aren’t thrown off by minor fluctuations.
“Listen, I’m not a pushover. I can hit CEOs with tough questions when needed, some of them deserve skepticism and scorn. But there are also plenty of brilliant, hardworking CEOs with incredible teams, and you ignore their hustle at your own peril. This often gets lost in the shuffle when we’re focused on the parlor game of guessing the Fed’s next move, a quarter point, half a point, quarter, half. You know what I say? Let’s get serious. Terrific companies don’t get caught up in that quarter-half shuffle.”
Cramer highlights Kroger CEO Rodney McMullen as an example of strong leadership. Despite facing challenges like opposition to its acquisition of Albertsons and a tough economic climate, McMullen has successfully managed to keep food costs down. Through strategies such as an effective loyalty program and improvements to regional stores, the company has performed well. After a strong earnings report, the stock rose more than 7%, reflecting a successful turnaround.
“CEO Rodney McMullen has managed to keep food costs down and deliver fantastic numbers, all while maintaining an expensive, unionized labor force in a very uncertain commodity environment. How? The company confounded critics by developing a superior loyalty program, regionalizing their stores, and creating some of the best private-label products out there, second only to Costco. Food is still expensive, but cooking at home is far cheaper than dining out. McMullen tells us that consumers are no longer flush with cash, especially his most budget-conscious clientele. He notes, “Budget-conscious customers are buying more at the beginning of the month to stock up on essentials, and as the month progresses, they become more cautious with their spending.”
Wow, that’s a tough environment! When I heard this, I thought back to the old company, the one that used to miss its numbers whenever the environment got a little tough. Everybody else remembers the old company too, which is why the stock was just sitting there waiting to be picked up, until this quarter’s report, after which it soared more than 7% in response to the fabulous results. Everyone thought the company would drop the ball, as they used to, but McMullen has finally whipped his supermarket into shape.”
In contrast, Cramer points out that the tech industry often suffers from misunderstandings due to its complex nature. He believes that Wall Street analysts frequently fail to appreciate the expertise and potential of tech CEOs who have a deep grasp of their businesses.
“We all need to eat, so it’s not hard to understand the grocery business. But it’s quite different when it comes to tech, where analysts constantly doubt the resolve and expertise of CEOs who simply know more about their businesses than the critics. In tech, the complexity often leads Wall Street to conclusions that have little to do with reality.”
Our Methodology
This article reviews a recent edition of Jim Cramer’s Morning Thoughts, where he covered different stocks. We have selected and analyzed the ten most notable companies mentioned, ranking them according to how much they are owned by hedge funds, from the least owned to the most owned.
At Insider Monkey we are obsessed with 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 close-up of an electrical power line with a bright blue sky in the background, highlighting the company’s selection of electricity and natural gas services.
Ge Vernova Inc. (NYSE:GEV)
Number of Hedge Fund Investors: 92
Jim Cramer highlights that Ge Vernova Inc. (NYSE:GEV), the spin-off of General Electric’s energy division that began trading separately in April, is seeing an increase in price targets. JPMorgan has raised its target from $216 to $240 per share, while Morgan Stanley has adjusted its target from $220 to $256. Cramer notes that Ge Vernova Inc. (NYSE:GEV) closed at $215.27 on Thursday, marking its fourth consecutive record high.
“More price-target bumps for GE Vernova , the spin-off of General Electric’s energy business that started trading on its own in April. The latest are from JPMorgan, which went to $240 a share from $216, and Morgan Stanley, which went to $256 from $220. Thursday’s close of $215.27 was the stock’s fourth record high in a row. Is GE Vernova best in show?”
Ge Vernova Inc. (NYSE:GEV) is an attractive investment due to its key role in the energy transition market, strong financial performance, and rising demand for clean energy solutions. Ge Vernova Inc. (NYSE:GEV) reported robust Q2 2024 results, with net income of $1.28 billion and revenue of $8.2 billion, driven by growth in its Electrification and Power divisions. Ge Vernova Inc. (NYSE:GEV) has increased its 2024 revenue forecast to between $34 billion and $35 billion and expects an adjusted EBITDA margin of 5-7%, reflecting improved operations and cost management.
As a leading player in the global shift toward clean energy, particularly in wind power and electrification, Ge Vernova Inc. (NYSE:GEV) is well-positioned to benefit from the growing demand for cleaner energy. Favorable market conditions, such as strong demand for power equipment and a focus on profitable areas within its wind business, further boost its prospects. These factors, along with the overall trend toward sustainable energy, make Ge Vernova Inc. (NYSE:GEV) a compelling long-term investment.
Carillon Eagle Mid Cap Growth Fund stated the following regarding GE Vernova Inc. (NYSE:GEV) in its Q2 2024 investor letter:
“GE Vernova Inc. (NYSE:GEV) is a global electric power company that was recently spun out of a much larger industrial conglomerate. The company’s shares performed well in their first quarter as a standalone company, primarily as a result of the increasing outlook for power demand growth, both domestically and abroad. We believe GE Vernova is well positioned to capitalize on this growing trend across its various products and services, but most notably within its large-scale gas turbine equipment and related services, as well as in its high-voltage electrical transmission products.”
Overall GEV ranks 4th on our list of Jim Cramer’s ultimate stock picks. While we acknowledge the potential of GEV as an investment, our conviction lies in the belief that under the radar 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 GEV 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 was originally published on Insider Monkey.
