We recently compiled a list of the Jim Cramer’s Lightning Round: 8 Stocks to Watch. In this article, we are going to take a look at where Semtech Corporation (NASDAQ:SMTC) stands against Jim Cramer’s other stocks.
Jim Cramer, the host of Mad Money, recently shared his insights on several key topics. He discussed the recent turmoil in the pharmaceutical sector, which followed the news that President-elect Trump is considering Robert F. Kennedy Jr. for the position of Secretary of Health and Human Services.
Cramer pointed out that the pharmaceutical industry took a significant hit after the announcement, but he believes this may present solid buying opportunities. Cramer acknowledged that RFK Jr., whom he humorously referred to as “Bobby Jr. for some Sopranos flavor,” has a strong anti-big pharma stance, which could be a concern for the sector. However, Cramer emphasized:
“… There’s a whole federal bureaucracy at HHS and frankly, I don’t think Trump will let him wreck a pretty important sector of the stock market.”
READ ALSO Jim Cramer Is Focused on These 15 Stocks This Week and Jim Cramer Talked About These 11 Stocks Recently
Cramer further addressed the potential confirmation of RFK Jr. as Secretary of Health and Human Services. He suggested that while there is a debate about whether the Senate will provide confirmation for him, he believes RFK Jr. will likely be approved. However, Cramer remained less concerned about RFK Jr. causing significant damage to the pharmaceutical industry, noting that he doesn’t expect him to have much success in pushing his anti-vaccine or anti-pharma agenda. Moving on to broader market trends, Cramer commented:
“After the initial Trump rally euphoria in the wake of the election, we quickly transitioned to a Trump rally hangover last week with the averages getting clobbered.”
He highlighted that semiconductor stocks were among the hardest hit, partially due to the typical tech sector sell-off when bond yields rise, as they did last week. Cramer also expressed concern, saying:
“With the election results from earlier this month and the second Trump administration coming in about two months, I am very worried about companies that are hostage to the Chinese economy.”
Finally, Cramer turned his attention to autonomous vehicles, suggesting that while the Trump administration’s plans for self-driving cars may sound ambitious, they could be more difficult to execute in practice.
He pointed out that a variety of state and local governments would need to align on new regulations, and the notion that the federal government could allow self-driving cars nationwide with a simple executive order seemed “just plain fanciful.” Despite this, Cramer advocated for owning TSLA, not because of any regulatory changes under Trump, but because he believes in the vision and leadership of the company’s CEO, Elon Musk.
Our Methodology
For this article, we compiled a list of 8 stocks that were discussed by Jim Cramer during the episode of Mad Money on November 18 and listed the stocks in the order that Cramer mentioned them.
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 technician looking at a circuit board of analog semiconductor products.
Semtech Corporation (NASDAQ:SMTC)
Talking about Semtech Corporation (NASDAQ:SMTC), Cramer said:
“I do think that Semtech is just a traditional kind of semiconductor company. I do prefer Texas Instruments to that one.”
Semtech (NASDAQ:SMTC) designs, manufactures, and markets analog and mixed-signal semiconductors and advanced algorithms, offering a wide range of products for applications in data communications, protection, sensing, voltage regulation, and IoT solutions. As per the company’s third-quarter guidance, it expects net sales to be approximately $233 million. Net sales from the infrastructure market are expected to grow sequentially, with data center applications leading this increase.
This sector is anticipated to be a key driver for the company’s near-term growth. Similarly, the high-end consumer market is forecasted to see an increase in sales, influenced by typical seasonal trends. Industrial net sales are also expected to rise slightly, aided by recovering booking activity that began in the first quarter and continued into the second quarter.
Semtech (NASDAQ:SMTC) also provided expectations for its gross margin, projecting it to reach 52%. If this forecast holds true, it would represent a 160 basis point improvement sequentially. Management further estimated net EPS to be $0.23. In terms of adjusted EBITDA, the company anticipates $48.7 million, which would result in an EBITDA margin of 20.9%.
Overall SMTC ranks 5th on Jim Cramer’s list of stocks to watch. While we acknowledge the potential of SMTC 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 SMTC 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.
