We recently published a list of Jim Cramer’s Latest Lightning Round: Top 10 Stocks. In this article, we are going to take a look at where T-Mobile US, Inc. (NASDAQ:TMUS) stands against other top stocks from Jim Cramer’s Latest Lightning Round.
Jim Cramer in a recent program on CNBC recommended investors to avoid worrying when others are anxious or get too excited about something when others are also doing the same. Cramer said by the time an idea is common among investors, its price already reflects its potential.
“Stocks don’t quite travel at the speed of thought but they come pretty close. So the moment a preponderance of hedge fund and mutual fund managers decide that the economy is slowing, speeding up, or flatlining, stocks start trading like that’s already the case. Usually, it takes some time to build that kind of consensus, which is why you rarely see these moves happening instantaneously. But once the big institutional portfolio managers are on the same page about something, you can be pretty darn confident that it’s baked into the averages. This is some basic economics 101 stuff.”
If every piece of news is priced in, does that mean it’s meaningless to invest in stocks and you are better off putting your money in broader market funds? Cramer calls this idea “bogus” and says the market is pretty irrational at times and stocks are incorrectly priced, giving investors an opportunity.
“The simple truth is that markets are not perfectly efficient. In fact, frankly, they’re often irrational. They ignore things, make mistakes, misvalue information every day. And that’s a major reason why anyone can make money picking individual stocks. These anomalies are everywhere, and they can be great for your portfolio,” Cramer added.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In
For this article, we watched the latest programs of Jim Cramer and picked 10 stocks he is talking about these days. With each stock, 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).
A customer checking out their new device at a T-Mobile store, illustrating the convenience and accessibility of retail stores.
T-Mobile US, Inc. (NASDAQ:TMUS)
Number of Hedge Fund Investors: 66
A questioner recently asked Jim Cramer about AT&T. Cramer said he prefers T-Mobile US, Inc. (NASDAQ:TMUS).
“I don’t want to own AT&T. Your description of what’s going to happen is very true. AT&T is reforming into a better company. Why do I want to own it? Because if I do want to own anything in that space, I want to buy growth. If I want to buy growth, that means I want to buy T-Mobile US, Inc. (NASDAQ:TMUS). Mike Sievert is doing a terrific job. The stock has been incredible, it’s been a horse, and they’ve got a great relationship with Apple. I’d rather be in that and forgo the dividend, which just can’t be nearly as important as the capital gain stream that you’ll get from being with T-Mobile US, Inc. (NASDAQ:TMUS).”
With a forward P/E ratio of about 20, T-Mobile is attractively valued. By 2028, T-Mobile anticipates adding another 12 million customers. Through partnerships with firms like Metronet and Lumos, T-Mobile plans to extend fiber coverage to 12-15 million more homes, helping to capture additional customers. T-Mobile expects its AI-driven customer service solutions to reduce inbound calls by about 75%, enhancing the overall customer experience.
Overall, TMUS ranks 6th on our list of top stocks from Jim Cramer’s Latest Lightning Round. While we acknowledge the potential of TMUS, 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 TMUS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock
Disclosure: None. This article is originally published at Insider Monkey.
