We recently published a list of Jim Cramer’s Latest Portfolio Heading Into 2025: Top 10 Stocks. In this article, we are going to take a look at where Magna International Inc. (NYSE:MGA) stands against other stocks in Jim Cramer’s latest portfolio heading into 2025.
Jim Cramer in a latest program reiterated his view that the market is currently oversold and told investors about his methodology of analyzing market selling and buying indicators based on an oscillator.
“Once it touches minus 5, you need to hold your nose and start buying, no matter how bad it looks. Minus 5 means we’re oversold and due for a bullish bounce. When the oscillator goes below minus 8, as it did last night, the only thing you can do is buy hand over fist. Under no circumstances should you sell with the oscillator below minus 8 because, at that point, the selling ship has sailed. The odds are against you if you sell into an extremely oversold market.”
Cramer then mentioned a few historical data points explaining the returns one could get if one invests when the market is in the oversold territory.
“If you bought the S&P 500 Index when the oscillator hit minus 8, you would have averaged a 2.88% gain within the next 30 days. That’s over a 10-year period, with the median up 4.7%. It gets even better 60 days out— the average gain was 8.93%, and the median was over 9%. Those are some huge moves. How about the odds? Thirty days after the oscillator hits minus 8, as it did last night, the market was up 70% of the time. Sixty days after, the market was up 80% of the time. That’s an extraordinarily reliable pattern, people. Nothing in the market is a sure thing, of course, but the frequency of those gains means the odds are heavily in your favor if you buy in an oversold market this time.”
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For this article, we watched several latest programs of Jim Cramer and picked 10 stocks he is talking about. With each company, we have mentioned its latest hedge fund sentiment. 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 assembly line of light trucks in a state-of-the-art manufacturing plant.
Magna International Inc (NYSE:MGA)
Number of Hedge Fund Investors: 15
Jim Cramer was recently asked about Canadian auto parts company Magna International Inc (NYSE:MGA). He recommended investors to stay away from the stock. Here is why:
“Autos are the worst place to be. I mean, there are two economies: the auto and housing economy, and then there’s everything else. And you’re in the heart of the bad part. I don’t want—I wouldn’t want to own that stock. That’s the way I would look at it. I just would not want to own it. I’m seeing terrible things going on in the auto industry.”
Aristotle Capital International Equity Strategy stated the following regarding Magna International Inc. (NYSE:MGA) in its Q2 2024 investor letter:
“Magna International Inc. (NYSE:MGA), a Canada‐based global auto parts, systems and assembly company, was one of the largest detractors for the period. The company lowered its 2024 sales guidance, having seen a slowdown in electric vehicle (EV) adoption across its customer base and expecting a halt in Fisker Ocean production. Despite concerns over automakers delaying EV rollouts, we continue to believe in the longer-term investment catalysts for Magna. These include the company’s ability to enhance margins from operational improvements and leverage its distinctive capabilities to supply parts for an increasingly electrified and autonomous fleet of vehicles. Magna specializes in lightweighting—a necessity for heavy internal combustion engines and electric vehicles—and has made years of investments in self-driving technologies. In addition, with leading market share positions in many of its core markets and products, we believe Magna remains well positioned to benefit as content‐per‐ vehicle increases and automotive parts and systems become more complex.”
Overall, MGA ranks 10th on our list of Jim Cramer’s latest portfolio heading into 2025. While we acknowledge the potential of MGA, 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 time frame. If you are looking for an AI stock that is more promising than MGA 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.