We recently compiled a list of the 6 Stocks Jim Cramer Talked About This Week. In this article, we are going to take a look at where Netflix, Inc. (NASDAQ:NFLX) stands against the other stocks Jim Cramer talked about this week.
Jim Cramer, host of Mad Money, recently reflected on how investors often overlook obvious opportunities, particularly with cult stocks, which in hindsight appear to be clear success stories. He discussed how, sometimes, the fundamentals that guide traditional investing can hold investors back from seizing these opportunities.
Cramer acknowledged that many investors, himself included, have missed out on these types of stocks and emphasized that it’s important to examine why these opportunities were missed to avoid making the same mistake again. He mentioned that, early on, he and others mistakenly believed that fundamentals were always the key to making sound investments, only to realize that in certain situations, that’s not the case.
Cramer highlighted that in the case of cult stocks, the stock price can sometimes move independently of the company’s underlying performance. These stocks can experience long-term growth due to a fiercely loyal shareholder base, and as a result, they may not follow traditional market behavior. He explained that while meme stocks might follow similar trends, cult stocks have staying power and can defy expectations.
“There’s a lesson here and it is a brutal one. Sometimes conventional methods of valuation are completely worthless, and you need to embrace the dynamics of cult stocks. The trick is to recognize when we’re in one of those moments. In 2025, let’s strive to find the stocks of companies that do defy orthodoxy.”
READ ALSO Jim Cramer’s Lightning Round: 7 Stocks to Watch and Jim Cramer’s Game Plan for This Week: 8 Stocks in Focus
Shifting the focus to the healthcare sector, Cramer noted that although the market has seen significant gains in recent weeks, it has become increasingly difficult to find promising investment opportunities. However, he believes that healthcare could be the place to look as 2025 approaches. Cramer explained that healthcare stocks have significantly underperformed this year, trailing behind the broader market, which has created an opportunity.
“Now, it’s hard to bet on healthcare when the Fed’s cutting rates because these are textbook slowdown stocks and thrived when the economy was not doing so hot, but the election was also a clear negative catalyst for the group.”
He noted that President-elect Trump’s potential appointment of Robert F. Kennedy Jr. to head the Department of Health and Human Services is a major concern for the industry, especially given Kennedy’s reputation as a vaccine skeptic. Cramer also warned that if the second Trump administration attempts to dismantle Obamacare, it could lead to many Americans losing access to affordable health insurance, which would add further risk to healthcare stocks.
Despite these concerns, Cramer believes that, at some point, all the negative factors will be factored into healthcare stocks, and that moment is fast approaching. He stated that the damage done to healthcare stocks, particularly in biotech and pharmaceuticals, has been severe, but he sees an opportunity as these stocks have become too cheap relative to their long-term potential.
“With so many groups hitting new highs, I think it’s worth taking a step back and putting money to work in one of the most hated groups out there, healthcare. These stocks have simply gotten too cheap given its prospects, especially Eli Lilly, Vertex Pharma, and Bristol-Myers.”
Our Methodology
For this article, we compiled a list of 6 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on December 16. 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 home theater with family members enjoying streaming content together.
Netflix, Inc. (NASDAQ:NFLX)
Number of Hedge Fund Holders: 121
Cramer noted that despite skepticism surrounding Netflix, Inc.’s (NASDAQ:NFLX) ad-supported tier, a series of successful shows and events kept loyal viewers engaged.
“Next up, Netflix. What the heck were we thinking when we didn’t own Netflix? Is there a week that goes by where we don’t talk about a Netflix show? The big linear TV networks like to do expensive shows about fires and hospitals and police… It’s been their formula since the 1970s. They just keep doing the same thing, failing each year. But Netflix, they come up with things like Jake Paul versus Mike Tyson and it did huge viewership numbers… Millions of people watched it… We watch all sorts of… programs from other countries because we’ve been taught by Netflix to like subtitles. It’s insane how good this company is. Honestly, convincing Americans to read subtitles, that may be the most important cultural event of the 21st century.
And yet Wall Street doubted Netflix the whole way when it came to the new ad-supported subscription tier. They didn’t get it perfect right out of the box and… many of these who followed the company presumed it was a bust. Oh, it was hardly a bust and it’s just gonna get bigger and bigger. It’s easy to say, of course, that… anyone could have had it. But those who spend their lives examining this company thought otherwise. They said, stay away and they’re the professionals. Who are we to doubt the professionals? They doubted the ad tier. Who are we to doubt them? And then there’s the multiple, the darn price-to-earnings multiple. Netflix was always selling for 50 times earnings, which is just too high for the people who care about valuation. But those people aren’t the general public. They aren’t the home gamers and the home gamers who love Netflix, they won. Cult stock that’s up 89% for the year.”
Netflix (NASDAQ:NFLX) is a leading global provider of streaming entertainment, delivering a wide range of movies, TV shows, and original content to millions of subscribers across the world. The company’s expansion into various regions has made it one of the most prominent entertainment platforms in the world, with 282.7 million memberships across its different subscription plans.
In 2024, Netflix made a significant mark in the sports streaming arena. The boxing match between former heavyweight champion Mike Tyson and YouTuber-turned-boxer Jake Paul, which aired on Netflix, became the most-streamed global sporting event ever, according to a Netflix release. The event attracted 65 million live concurrent streams, with a total of 108 million live viewers worldwide.
Furthermore, Netflix (NASDAQ:NFLX) has seen positive growth with its ad-supported subscription tier. Launched two years ago, the cheaper plan has already reached 70 million global monthly active users. In November, the company revealed that more than 50% of new sign-ups in countries where the ad-supported option is available are opting for this plan.
Overall NFLX ranks 1st on our list of the stocks Jim Cramer talked about this week. While we acknowledge the potential of NFLX 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 NFLX 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.