We recently compiled a list of the Jim Cramer’s Lightning Round: 9 Stocks in Spotlight. In this article, we are going to take a look at where Globe Life Inc. (NYSE:GL) stands against the other stocks featured in Jim Cramer’s Lightning Round.
Jim Cramer, the host of Mad Money, recently discussed a market trend that’s been generating impressive gains, especially when investors target heavily shorted stocks. He explained the phenomenon as he said that investors find success by betting that these companies are in better shape than short sellers expect. According to Cramer, this approach has led to some significant wins in recent times. He pointed out the behavior of short sellers, noting that when things go wrong for them, they panic.
“The shorts always panic when their trades fall apart because, unlike longs, if you’re a short seller, you can lose a lot more than a hundred percent of your investment if the stock goes up too much.”
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Cramer also highlighted that while short sellers can profit when a company fails, it’s a risky game with significant asymmetry. He explained that while a stock’s price can only fall to zero, it has the potential to rise indefinitely. Cramer cautioned that although short sellers might be hoping for a stock’s downfall, they are equally vulnerable to the nightmare scenario of infinite losses if the stock price continues to climb.
In such situations, when short sellers run out of options, they are forced to buy back shares, which can send the stock price even higher. For shareholders, this scenario can be advantageous. While short sellers may be a threat when predicting a stock’s decline, their need to buy back shares can act like rocket fuel for the stock’s price when good news emerges.
“If you’re a shareholder, they’re your worst enemy when they’re talking about a stock going to zero. But once the stock starts soaring on any good news, the shorts are your best friend because their forced buying is like rocket fuel and they can’t stop the propulsion while you just get to go along for the ride.”
Our Methodology
For this article, we compiled a list of 9 stocks that were discussed by Jim Cramer during the recent episodes of Mad Money. 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).
A doctor and patient discussing an insurance policy with an insurance underwriter.
Globe Life Inc. (NYSE:GL)
Number of Hedge Fund Holders: 33
Cramer expressed lukewarm sentiment about Globe Life Inc. (NYSE:GL), saying:
“Well, it’s kind of an interesting Medicare supplement insurance company… nothing wrong. It sells at eight times earnings. I’m gonna tell you it’s fine, it’s not exciting, it’s not boring, it’s just fine.”
Globe Life (NYSE:GL) offers life and supplemental health insurance products, as well as annuities, to lower middle- and middle-income families in the United States through its various subsidiaries. On November 14, the company declared a quarterly dividend of $0.2400 per share.
This dividend will be distributed to all holders of outstanding common stock as of the close of business on January 6, 2025, with payment scheduled for January 31, 2025. As of November 22, the stock’s yield was 0.87%. Matt Darden, Co-Chief Executive Officer recently highlighted the company’s consistent history of share repurchases, with approximately $10 billion of common stock bought back since the launch of its share repurchase program in 1986.
On November 18, Globe Life (NYSE:GL) further announced an extension to its stock repurchase program, authorizing the buyback of up to $1.8 billion worth of common stock. This new authorization supersedes a previous approval of $1.3 billion that was made earlier in the year on April 29, 2024.
Overall GL ranks 4th on our list of the stocks featured in Jim Cramer’s Lightning Round. While we acknowledge the potential of GL 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 GL 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.
