We recently compiled a list of the Jim Cramer’s Best Performers List: 12 Stocks Cramer is Talking About. In this article, we are going to take a look at where Vistra Corp. (NYSE:VST) stands against the other best performers on Jim Cramer’s list.
On a recent episode of Mad Money, Jim Cramer took a moment to celebrate the two-year anniversary of the current bull market. He mentioned that this particular bull market has been quiet and gentle, which he attributes to the unusual circumstances surrounding its rise. “The whole first year of this bull’s life was an anomaly. That’s because the Fed was furiously tightening and the market went up anyway,” Cramer explained.
He emphasized that for the past two years, opportunities have been evident, stating, “Every night I say there’s always a bull market somewhere, and for the last two years, well, it’s been right in front of you.”
Cramer then went on to discuss the lead performing stocks and ended the segment, saying:
“The bottom line, if you’re going to buy these stocks, I’d go first with Nvidia, then with Broadcom, and finally Fair Isaac, if only because we need something that’s not connected to the data center, even as we know, it will remain a strong story for the ages.”
Cramer also advised investors to shift their focus away from the consumer price index (CPI) report, suggesting that its significance has diminished since the Federal Reserve began cutting rates.
“We had to be concerned about this stuff when the Fed was on the warpath, either raising rates or leaving them higher for longer. Now, though, the Fed is your friend, so I wouldn’t obsess about the details.”
He did emphasize, however, that the monthly labor report remains important in the current climate. He remarked on the tendency for many to become “Fed watchers,” suggesting that this reliance on government data can detract from the deeper analysis of individual companies. Cramer referenced Austan D. Goolsbee, president of the Chicago Fed, who advised against an overemphasis on CPI data, as the Fed is unlikely to base decisions on it. Cramer explained:
“When the Fed’s raising rates in order to stamp out inflation, it can be very important. When we’re in a rate hike cycle, you’re trying to figure out when that’s going to end. But we’re not in that kind of cycle anymore. We’re in a rate cutting cycle.”
Cramer explained that last month the Fed implemented a double rate cut, setting a downward trend that is expected to continue. He added:
“Sure, if we had a huge spike in the CPI this morning, then maybe the Fed would change its stance. But that would have to be an extreme reading. And there’s nothing extreme about today’s 2.4% inflation number, just a tick above the expected 2.3, still down from the 2.5% reading from the prior month.”
Cramer concluded with a strong reminder about the nature of investing. “Forget the macro, people. It’s not that meaningful when the Fed’s cutting rates. And keep your eyes on the prize: Earnings,” he urged. Ultimately, he reinforced that earnings dictate stock prices in the long run, and that’s where the focus should be for those looking to make money in the market.
Our Methodology
For this article, we compiled a list of 12 stocks with the biggest gains over the past 2 years that were mentioned by Jim Cramer during his episode of Mad Money on October 10. 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).
Solar panel workers installing a new farm for clean energy generation.
Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 92
While Cramer said that Vistra Corp. (NYSE:VST) is a little overdone, he still likes the stock. He stated:
“Third is a company we’ve been talking increasingly about this year. It’s called Vistra and this one’s about the data center too. Vistra’s one of the largest independent power producers. Nuclear capacity, which means reliable carbon-free energy. Data centers are voracious consumers of energy and the companies that use them can’t get enough of. Now. I personally think the stock’s a little overdone given its 479% move, but the next time it has one of its monster pullbacks, which do occur, I would do some buying.”
Vistra Corp. (NYSE:VST) is a retail electricity and power generation company. The company serves residential, commercial, and industrial customers across the United States and the District of Columbia, providing both electricity and natural gas. In addition to its retail operations, the company is actively involved in electricity generation, wholesale energy transactions, commodity risk management, fuel production, and fuel logistics management.
Currently, the company has a generation capacity of 41,000 megawatts (MW), with 24,000 MW sourced from natural gas. However, the market’s attention has increasingly turned towards the company’s 6,400 MW of nuclear power. The company increased its nuclear power capacity as it added 4,000 MW of nuclear capacity through the purchase of Energy Harbor in March for $3.43 billion.
The deal not only added four nuclear-generating facilities to Vistra Corp.’s (NYSE:VST) portfolio but also positioned the company as holding the second-largest energy storage capacity in the United States, with 1,020 MW. The timing of the acquisition aligns well with the current enthusiasm surrounding generative AI, potentially providing the company with advantageous opportunities.
In September, the company announced plans to acquire the remaining 15% of Vistra Vision, the subsidiary that runs its nuclear-generation facilities, renewable energy projects, and energy storage operations.
Overall VST ranks 5th on Jim Cramer’s list of best performing stocks. While we acknowledge the potential of VST 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 VST 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.
