On Friday, Jim Cramer, the host of Mad Money, reminded his viewers that during volatile market days like that very day, it is easy to get caught up in the chaos and miss the bigger picture. He emphasized that understanding the overall picture could reveal significant opportunities. Cramer also took the time to go over some of his favorite casual dining stocks, pointing out that the CEOs of these companies had previously appeared on his show and provided valuable insights into the business.
“I want you to listen to me, breathe in, breathe out slowly… and don’t take any action until you’re certain that you can handle any amount of pain if it goes against you. If you think you can cope, then use the craziness that is happening in this stock market to start a position or to put money in an index fund that mirrors the S&P 500 because I think you’ll do fine, but if you can’t take the pain, don’t even think about it.”
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According to Cramer, the current market is far too volatile and fragile. He warned that if investors lack the mental strength to withstand short-term downturns, they risk buying stocks at their peak and selling them at a loss before witnessing a market rebound, like what happened that very day. The market started strong, dipped significantly, and then quickly recovered. He went to say:
“When the market’s going up, everybody wants to wait for a pullback to buy stocks at a better price but once stocks start rolling over, we get terrified and we can’t bring ourselves to pull the trigger. Lately, we’ve experienced a wholesale liquidation. I think there’s some great buying opportunities out there, you just need to know how to find them.”
Cramer specifically pointed to casual dining stocks that have taken a hit, even after reporting strong earnings. He suggested that some of the decline could be attributed to profit-taking after a peak in stock prices, while other factors like high valuations may have contributed as well. Furthermore, some of the weakness in these stocks was due to softer traffic in early February, which he noted was due to bad weather, as well as the ongoing trade war negatively affecting consumer sentiment.
“The bottom line: When you look at these three casual dining plays, their stocks are down big from their highs. I think they’re absolutely worth buying. Even if the economy’s truly headed for a nasty slowdown, these chains offer the consumer great value and that’s exactly what the consumer wants at this moment.”
Our Methodology
For this article, we compiled a list of 8 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on March 7. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the fourth quarter of 2024, which was taken from Insider Monkey’s database of over 1,000 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Jim Cramer Put These 8 Stocks Under the Microscope
8. Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL)
Number of Hedge Fund Holders: 21
Cramer recently highlighted Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) as a stock that has caught his attention. Although the stock has experienced a significant decline in recent weeks, Cramer noted that the company’s management has pointed to factors such as unfavorable weather conditions and broader macroeconomic uncertainty as contributors to the challenges faced in early February.
While this situation is not ideal, Cramer emphasized that there are still positive aspects to consider. He pointed to the strong set of numbers the company reported recently, with better-than-expected same-store sales growth. Furthermore, Cramer acknowledged that the macroeconomic uncertainty has already been factored into the company’s four-year forecast, which the company recently raised. He added:
“While management admitted that February got off to a challenging start, they said the last two weeks have seen meaningful improvement. I like that. Not too surprised when you remember that Cracker Barrel also represents a stellar value proposition like the other two… Now Cracker Barrel is still very much a work in progress. Something that CEO Julie Masino is quite candid about.
On the conference call, she explained that this year is still an investment year before ‘financial results will significantly improve by the second half of fiscal 2026 and further accelerate into fiscal 2027’. No wonder the stock’s been a hard hit, down more than 33% from its highs at the end of January despite yesterday’s 7% gain. Now we had Julie on the show and I point blank asked her if we can count on Cracker Barrel to be a refuge from all the craziness when you go to the stores, not the stock.”
Cramer referred to comments from the CEO who explained that the company’s struggles in early February were largely due to extremely bad weather. Cramer noted that the stock has nearly retraced to the same level it was at when he first recommended it last summer, marking a significant shift. Despite the challenges, Cramer believes Cracker Barrel (NASDAQ:CBRL) is a good buy. However, he cautioned that the company is in the midst of a turnaround, which inherently makes it a riskier option compared to other restaurant chains like Brinker or Texas Roadhouse.
Cracker Barrel (NASDAQ:CBRL) operates a chain of restaurants with attached gift shops, offering a variety of meals, including breakfast, lunch, and dinner, along with pick-up and delivery services, while its gift shops feature a range of products like home décor, clothing, food items, and seasonal gifts.
7. Texas Roadhouse, Inc. (NASDAQ:TXRH)
Number of Hedge Fund Holders: 52
Cramer expressed his positive view on Texas Roadhouse, Inc. (NASDAQ:TXRH). He shared that the Charitable Trust had decided to purchase some shares, highlighting the company’s strong performance. Two weeks ago, the company reported what Cramer considered to be an impressive quarter, exceeding expectations with same-store sales growth of 7.7% and a solid earnings beat. He added:
“Sure, not as crazy as the results from Breaker, absolutely, but Texas Roadhouse is a much more mature company, just happens to be a real steady operator with a lot of room to grow. Also, unlike Brinker, Texas Roadhouse has held up surprisingly well, with the stock down only a few bucks from early February… I like this one for the same reason I like Brinker. Texas Roadhouse offers what I call relative value… When we spoke to CEO Jerry Morgan just two weeks ago, he acknowledged that while the beginning of February was a bit choppy, recent trends were encouraging…
It doesn’t hurt that the company’s buying back stock hand over fist. Last year, they repurchased $80 million worth of shares and they just announced a new $500 million buyback authorization alongside the latest quarter. Even though the stock hasn’t been hit hard, well somewhat, it’s been hit somewhat hard, it’s still down nearly 30 points from its November highs. I think it’s a proven winner that can return to those levels, which is why we’ve been buying for the Charitable Trust and we want to buy a heck of a lot more.”
Texas Roadhouse (NASDAQ:TXRH) is a well-known casual dining restaurant chain with establishments across the U.S. and internationally.
6. Brinker International, Inc. (NYSE:EAT)
Number of Hedge Fund Holders: 51
Talking about Brinker International, Inc. (NYSE:EAT), the parent company of Chili’s and Maggiano’s, Cramer recalled having CEO Kevin Hochman on the show at the end of January, just after the company reported one of the strongest quarters Cramer had ever seen. He added:
“Chili’s had 31% same-store sales growth and the whole company earned $2 and 80 cents per share., nearly a full dollar ahead of the estimates. In response, the stock, shot up more than 16% in a single day, and then it kept running all the way from $154 to $192 in early February. Since then, though, Brinker’s pulled back hard to $141, down substantially from where it was trading before the quarter.
So how the heck does the stock collapse like this in a little over a month after reporting a spectacular quarter? Now, some of it’s pure profit taking at the peak. Brinker was up mind boggling 315% over the previous 12 months. Now some of it’s valuation… We gotta ask, is Brinker worth buying a weakness? Now look, I’ve been a fan of this one for ages. I think the basic story hasn’t changed at all. Brinker’s been able to put up great numbers because it offers customers an incredible value proposition.”
Brinker (NYSE:EAT) operates casual dining restaurants primarily under the Chili’s Grill & Bar and Maggiano’s Little Italy brands, along with a franchising model.
5. Beacon Roofing Supply, Inc. (NASDAQ:BECN)
Number of Hedge Fund Holders: 53
Noting the chatter around Beacon Roofing Supply, Inc. (NASDAQ:BECN), a caller asked Cramer’s thoughts, and here’s what Cramer had to say:
“Yeah, you’re gonna get a bid. It’s gonna take, they’re gonna have to accept, I believe… they have to accept the offer, the, the hostile takeover that we’re seeing right now and if they don’t do it, I think they’re going to regret it because this, this, the takeover is at a higher price. It’s QXO that is doing the buying. And I think you ought to buy this stock and take advantage of what I think is gonna be a high bid price.”
Beacon Roofing Supply (NASDAQ:BECN) distributes a wide range of roofing and building products, including various types of roofing materials, insulation, siding, decking, and related accessories, as well as tools, safety gear, and equipment, catering to professional contractors, home builders, and retailers.
4. United Airlines Holdings, Inc. (NASDAQ:UAL)
Number of Hedge Fund Holders: 86
A caller wondered why people are not buying United Airlines Holdings, Inc. (NASDAQ:UAL) at $140 and Cramer replied:
“I am a buyer. I am a buyer of United Airlines. I know it’s down 15% but it became again, a momentum stock. I think you’re right. I think it’s cheap. The travel thesis is strong. If I had to pick up some United Airlines, I’d buy some here then wait till around $70 and buy the rest. That’s what I’ve been doing for the Charitable Trust when I see stocks just like this.”
United Airlines (NASDAQ:UAL) is a provider of air travel services and offers transportation for both passengers and cargo. In February, Cramer noted the turnaround in the airline industry and suggested buying UAL:
“Old hands like me are used to seeing the airlines collapse once or twice a decade. Not anymore. You don’t need to think this went through. You just need… the obvious. You go, go buy United, it’s up 10% year-to-date.
I think it can challenge its old high of $116 given that people seem to want to travel no matter what. We’re well past the initial post covid boom here. I think it can absolutely justify paying eight times earnings for United.”
3. NIKE, Inc. (NYSE:NKE)
Number of Hedge Fund Holders: 73
A caller expressed concern over NIKE, Inc. (NYSE:NKE) releasing low-quality products, and in response, Cramer said:
“Let me tell you how I feel about it. I think that Mr. Hill is doing exactly as you say. I also think that the stock looks very expensive, but maybe they’re going to have an earnings acceleration. If I owned Nike, I would certainly hold it. If the stock would’ve dropped back even to the, to the low $70s, I myself might pick some up for my Charitable Trust so I think that Elliot Hill is making it work. I think he’s doing a good job now.”
NIKE (NYSE:NKE) creates, manufactures, promotes, and sells athletic footwear, clothing, equipment, accessories, and services, including gear designed for various sports. In December 2024, Cramer remarked, “Yeah, but you know people always want to get the jump on that thing, look I don’t think Nike’s anywhere near where it has to be… Jordan’s not selling. People don’t want to talk about that.”
2. Delta Air Lines, Inc. (NYSE:DAL)
Number of Hedge Fund Holders: 84
Noting the current strong travel demand, a caller asked if Delta Air Lines, Inc. (NYSE:DAL) was a buy and Cramer replied:
“I do prefer United to Delta. The group is really under a lot of pressure right now, but I think that they’re going to have a very strong summer. I would hold on.”
Delta Air Lines (NYSE:DAL) is an airline company that provides air travel and cargo services, operating a broad range of domestic and international routes. In January, commenting on the company, Cramer said:
“But I’m [inaudible] with Ed Bastion this morning, the CEO of Delta, 25 years he said it’s never been this good. I thought I would never see United over one hundred. Nine times earnings. You know… I want to be more negative. But the thing I’m negative on, is something which just says, you know what, economy’s still hiring. I gotta take recession off the table. Isn’t that terrific?…
I wanna see things that are good for earnings. And when I get them, I’m not gonna say, you know what, I am seller of Delta because Ed Bastion doesn’t know what he is talking about. Ed Bastion does know what he’s talking about. In profitability, yes we may not pay as much for profitability, but I would have thought that if the Fed were really, really as nervous as they seem, that Delta would have had not a blow out number, but a disappointment. And they didn’t.”
1. Dow Inc. (NYSE:DOW)
Number of Hedge Fund Holders: 48
A caller asked Cramer’s opinion on Dow Inc. (NYSE:DOW) and he said:
“Well, okay, so Dow is trading with all the other chemicals as if they are just calls on China turning around. It’s a wrong thing, but that’s, I gotta tell you straight, that’s what it’s trading on and therefore that means it’s not a stock you should own right now and the yield might not protect you as people thought at 5 and 6%.”
Dow (NYSE:DOW) offers a wide range of materials science solutions that serve multiple industries, such as packaging, infrastructure, mobility, and consumer products. Earlier in January, when Cramer was asked about the company, he commented, “I don’t want to sell it here, we might be at some sort of trough at this very moment in Dow pricing. So, I think you should hold on to the stock.”
While we acknowledge the potential of Dow (NYSE:DOW) 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 time frame. If you are looking for an AI stock that is more promising than DOW but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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