We recently compiled a list of the 8 Cheap Jim Cramer Stocks to Invest In. In this article, we are going to take a look at where Huntington Bancshares Incorporated (NASDAQ:HBAN) stands against the other cheap Jim Cramer stocks.
On a recent episode of Mad Money, Jim Cramer criticized the semiconductor sector’s performance on Tuesday, particularly in light of a significant sell-off in semiconductor stocks following disappointing earnings from ASML, which wiped out over $50 billion from its market capitalization. Cramer argued that many on Wall Street fail to grasp the enduring significance of advanced graphics chips in artificial intelligence. He emphasized that as long as innovations and new applications for computing power continue to emerge, the demand for these chips will persist.
“I don’t think the need for speed is going away. In fact, it’s only going to increase, especially when tech companies and utilities are fiercely trying to put up nuclear power plants to meet the energy demands.”
Cramer expressed frustration at how quickly some investors rushed to declare the semiconductor sector in decline.
“There were many money managers and writers falling all over each other just at the close of yesterday, at the closing bell, to write the definitive obituary for this group, even as it’s less of a group than more of like a parliament of owls that’s somehow been combined with a pride of lions, two very different beasts. As I watched and listened, I said to myself, this terrible miss by some abstruse Dutch outfit is going to make people miss out on what could be the next leg of a powerful, semiconductor rally fueled by the wall of worry and skepticism that’s being built right in my face.”
He also pointed out that various industries are only beginning to experience “AI-powered revolutions.” He explained:
“… As Jensen told me, software never dies. As long as there are new inventions and new uses for computer power, there will be more need for these chips. And you can attach them to the software, no matter what the iteration. You just have to keep buying them because you have to keep up. Right now we have revolutions just starting in healthcare, manufacturing, climate change, cybersecurity, autonomous driving, and even robots.”
He further talked about how the current bull market could gain momentum if the tech sector maintains its strength. Cramer highlighted analysis from Jessica Inskip, noting that both the S&P 500 and the Nasdaq-100 are showing promising charts. He pointed out that the market has expanded significantly compared to six months ago, but for this upward trend to persist, Inskip emphasized the need for substantial engagement from tech stocks.
Cramer discussed the weekly performance charts of the Nasdaq 100, which features some of the largest technology companies. Although the index remains in a positive trading cycle, it has not reached new highs like the S&P 500. Inskip mentioned that while the Nasdaq 100 is moving in a favorable direction, it must surpass its July peaks to stimulate a broader market rally. While Cramer acknowledged that tech might not need to lead the market, it still must closely follow the stronger sectors.
Our Methodology
For this article, we compiled a list of nearly 80 stocks that Cramer was bullish on during episodes of Mad Money aired in October. We narrowed the list to 8 stocks that had a forward price-to-earnings ratio of under 15 and were most widely held by institutional investors. 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 professional banker with a stack of mortgage papers and a pen in hand, ready to make the deal.
Huntington Bancshares Incorporated (NASDAQ:HBAN)
Forward P/E: 13.30
Number of Hedge Fund Holders: 32
Huntington Bancshares Incorporated (NASDAQ:HBAN) was discussed by Cramer recently who called it a “terrific story”.
“Next up, the Columbus-based Huntington Bancshares… the parent company of Huntington Bank, and a company, by the way, we know well. After speaking with CEO Stephen Steinour several times over the last couple years, I recommended this one in early August.
And when the whole market sold off hard after the yen carry trade fell apart, remember that fiasco? Since then, it’s rallied nearly 11%. I felt comfortable recommending Huntington into weakness because we just had Steinour on the show less than a week before in the wake of a very healthy quarter. Steinour told a really positive story, saying that we’re on the verge of a rate-cutting cycle. And after many banks spent last year on risk-weighted assets diets as they recovered from the crisis, that’s mostly over now.
Listen to this, ‘We are incredibly well-positioned in the Midwest, and in addition, we’ve recently expanded in the Carolinas and a bit into Texas. So we have this unique franchise with a lot of growth potential. Columbus itself, our headquarters city, is doing phenomenally well. We’ve been growing deposits every quarter, we’ve grown loans and we’re in a great position to continue to grow and frankly to help the economy and our customers.’
Again, terrific story. Even though Huntington has had a nice run since then, still got a 4.2% yield, plenty of earnings growth on the horizon as interest rates come down.”
Huntington Bancshares (NASDAQ:HBAN) operates as the parent company for The Huntington National Bank, providing a range of banking services across the United States. Recently, the company released its financial results for the third quarter, reflecting growth in various key areas. The report highlighted a sequential rise in net interest income and fee revenues, along with consistent growth in loans and deposits, while maintaining strong credit quality.
Huntington Bancshares (NASDAQ:HBAN) reported earnings per common share of $0.33 for the quarter, which marked an increase of $0.03 from the previous quarter, although it was slightly down by $0.02 compared to the same quarter last year. Net interest income saw an uptick of $39 million, or 3%, relative to the prior quarter; however, it experienced a decline of $17 million, or 1%, compared to the year-ago period. Noninterest income also showed positive movement, increasing by $32 million, or 7%, from the previous quarter, bringing it to a total of $523 million. Year-over-year, noninterest income rose by $14 million, or 3%.
Deposit growth was another highlight in the financial report, with average total deposits climbing by $2.9 billion, or 2%, from the prior quarter, and up $8.3 billion, or 6%, compared to the same quarter last year. Ending total deposits showed a similar trend, increasing by $4.0 billion, or 3%, from the prior quarter and $9.5 billion, or 6%, year-over-year. As of September 30, 2024, the company held $95 billion in cash and cash equivalents, along with available contingent borrowing capacity, which represented 195% of estimated uninsured deposits.
Overall HBAN ranks 7th on our list of the cheap Jim Cramer stocks to invest in. While we acknowledge the potential of HBAN 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 HBAN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Read Next: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.
