We recently published a list of Jim Cramer’s Latest Lightning Round: Top 10 Stocks. Since Royalty Pharma plc (NASDAQ:RPRX) ranks 10th on the list, it deserves a deeper look.
Jim Cramer in a latest program on CNBC said that the market has already priced in the expected positive comments from the Fed Chair Jerome Powell at the Jackson Hole event in Wyoming. Cramer said some bulls might be hoping for an indication of “multiple rate cuts,” but that’s “not gonna happen.”
Cramer talked about the latest 8-day winning streak of the market which he called a “resurrection.” He said that almost “anything” during these days went up. Even the companies with “bad” results went up because investors thought they would improve once the Fed began to cut interest rates, Cramer said.
“But that was then, this is now. Since the winning streak ended we are starting to get into what I call the buyer’s remorse phase of this move. Stocks have had a nice run based on nothing more than hope are now rolling over hard.”
Jim Cramer also pointed to the possible events in the coming months that could keep the markets depressed:
“Maybe the Fed is already too late and the economy will get real ugly or maybe traders are beginning to fear the possibility of a democratic sweep in November which could lead to higher corporate tax rate, bad for earnings. And a potential witchhunt for price gouging in the aisles of the supermarket and the drug stores.”
For this article we picked 10 stocks Jim Cramer talked about during his latest programs on CNBC. With each company we have mentioned the number of hedge fund investors. 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).
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Royalty Pharma plc (NASDAQ:RPRX)
Number of Hedge Fund Investors: 34
Jim Cramer was recently asked about Royalty Pharma. Here is what he said:
“I always thought there is going to be more in this stock than it has been. It’s really been a bit of a bust, I feel badly.”
During the second quarter, the company’s portfolio receipts saw a 12% rise year over year, aided by growth in the cystic fibrosis franchise and GSK’s Trelegy.
Royalty Pharma plc (NASDAQ:RPRX) controls about 60% of the pharma royalty market. What makes the company stand out is its long-term royalty agreements, primarily backing drugs that are nearing full approval. This approach reduces risk for Royalty Pharma, as it invests in drugs with a clearer path to market. Currently, the average duration of Royalty Pharma plc (NASDAQ:RPRX) portfolio is around 13 years.
Despite a challenging market environment with tighter capital requirements and rising costs, Royalty Pharma is confident that it can grow. The management has raised its guidance for portfolio receipt growth, increasing the expected range from 5-9% to 9-12% for the year.
Royalty Pharma plc (NASDAQ:RPRX) has a dividend yield of about 3%.
Overall, Royalty Pharma plc (NASDAQ:RPRX) ranks 10th on Insider Monkey’s list titled Jim Cramer’s Latest Lightning Round: Top 10 Stocks. While we acknowledge the potential of Royalty Pharma plc (NASDAQ:RPRX), 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 RPRX 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.