Jim Cramer, host of Mad Money, recently shared his thoughts on how geopolitical concerns, particularly the recent nuclear threat, can significantly impact investor behavior. He pointed out that when such threats arise, investors typically become more cautious and often seek safer investments, such as U.S. Treasury bonds.
Cramer referred to this phenomenon as a “flight-to-quality,” a pattern that has become particularly noticeable in the context of rising bond yields. He commented:
“We’ve had a bad bond market of late with rates going up and this Russian new concern changed the direction of bonds as these flight-to-quality buyers drove bonds up and interest rates lower.”
Cramer explained that fast traders are well aware of how to react to rising long-term interest rates. Their instinct is to invest in tech stocks, regardless of whether bond rates are actually decreasing. According to Cramer, it’s a predictable move that, when bond prices rise and yields fall, investors inevitably turn to tech stocks.
This holds true even in cases where investors are seeking out treasuries because of a flight to quality or because inflation is easing. He emphasized that, whenever there is a rally in bonds and a dip in bond yields, it’s almost automatic that tech stocks will see increased investment. He added:
“Next time nukes are threatened and you see a flight-to-quality, remember this, the highest quality is the Magnificent Seven.”
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Cramer also discussed how the market might react to potential trade policy changes, particularly the threat of tariffs under President-elect Donald Trump. He referred to an analysis by Jessica Inskip, the director of investor research at StockBrokers.com, which suggested that the market was largely unaffected by Trump’s pre-election threats of tariffs.
“The charts interpreted by Jessica Inskip suggest that tariffs had little impact on the market until they actually materialized during Trump’s first term, all the saber-rattling beforehand didn’t do much damage. Even when the tariffs actually hit and the market sold off, we eventually erased those losses the moment that the Fed stopped raising interest rates. So until the tariffs actually hit, Inskip says, you can take a page from Taylor Swift and Shake It Off… I think she’s got a real good point.”
Jim Cramer Recently Discussed These 7 Stocks
Our Methodology
For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during the recent episodes of Mad Money. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 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).
Jim Cramer Recently Discussed These 7 Stocks
7. Liberty Energy Inc. (NYSE:LBRT)
Number of Hedge Fund Holders: 23
Cramer dived into Liberty Energy Inc.’s (NYSE:LBRT) CEO’s views and discussed the stock’s recent performance.
“Let me say from the outset that I think the world of Liberty Energy, the oil service company run by Chris Wright, who’s Trump’s pick for Energy Secretary. It’s the fourth largest oil service company in North America, covering all the major basins. I like fracking. I like oil service companies that help extract fossil fuels from land.
Their August slide deck titled ‘Liberty Energy and Energy Realities’ is a terrific document… The energy and geopolitics section will make you feel proud of what Liberty does and more important, the way fracking has changed the balance of power worldwide. You will feel safer. You are safer. Oh, but then there’s that last page in the deck, the conclusion page. And here, Wright, and I, we part company. The conclusions reached, I find are downright antediluvian and would be condemned by every single contemporary oil executive I’ve ever met… First conclusion Wright reaches: there is no climate crisis. Now every other oil person I’ve met is worried about a climate crisis…
No climate crisis? Gimme a break. Second: there is no energy transition. Not only do most oil CEOs accept that there’s an energy transition, they’re all preparing for it… How about this third conclusion? Net Zero 2050 is the sinister goal. I mean, really? I mean, sure the document adds Zero Energy Poverty 2050 is a superior goal. Oh, sinister? I’m calling that an ill-advised description…
What matters to you is that in my nearly 20 years doing Mad Money, Wright’s ethos is different from every CEO’s, both on camera and off. And you’re watching someone who’s… [a] champion of what the oil and gas industry has done for our security and our power as a nation… I’m not seeing this Liberty Energy at [the] top of the 52-week high list. In fact, it’s less than one point above a 52-week low. Down more than seven bucks from its 52-week high of $24.75. It’s selling at less than 10 times earnings. It has far underperformed the XLE, that’s the largest energy ETF.”
Liberty Energy (NYSE:LBRT) offers hydraulic fracturing and related services, including wireline, proppant delivery, data analytics, and well site logistics, to onshore oil and gas companies in North America. As per Bloomberg, CEO Chris Wright is known for his outspoken support of the oil and gas industry. Wright does not have experience in Washington, but he has been a vocal advocate for the crucial role that fossil fuels play in driving economic growth and reducing poverty.
President-elect Donald Trump has made a note of his career, which includes pioneering efforts that contributed to the American Shale Revolution, a movement that was instrumental in propelling the United States toward energy independence. According to Trump, Wright’s work in the energy industry has made him a key figure in shaping the modern landscape of energy production and policy.
6. TransMedics Group, Inc. (NASDAQ:TMDX)
Number of Hedge Fund Holders: 32
When Cramer was asked about TransMedics Group, Inc. (NASDAQ:TMDX), he remarked:
“I don’t know how you can really make a lot of money in that business, frankly. I applaud them for doing it, but I just don’t know how you can make the money.”
TransMedics Group (NASDAQ:TMDX) is a medical technology company that transforms organ transplant therapy with its Organ Care System (OCS), which preserves and monitors donor organs outside the body while also offering logistics and organ retrieval services. Since its IPO in 2019, the stock is up over 200%. In the third quarter, the company reported a significant 64% increase in revenue year-over-year, which was largely attributed to a rise in the utilization of its Organ Care System.
The company also posted an EPS of $0.12, a reversal from the loss of $0.78 per share reported in the same quarter the previous year. While these results showed strong growth, they did not fully meet market expectations, as analysts had anticipated even greater revenue expansion and a higher EPS.
Despite the shortfall in certain expectations, TransMedics Group (NASDAQ:TMDX) has reaffirmed its full-year revenue guidance, projecting growth of between 76% and 84% compared to 2023. Furthermore, management reiterated its long-term goal to facilitate 10,000 organ transplants annually by 2028, a target that would nearly triple the current number of transplants performed with the assistance of its Organ Care System.
5. Devon Energy Corporation (NYSE:DVN)
Number of Hedge Fund Holders: 41
Commenting on Devon Energy Corporation (NYSE:DVN), Cramer said, “I like Devon, but I think Coterra is far superior to Devon.”
Devon Energy (NYSE:DVN) is an independent energy company involved in the exploration, development, and production of oil, natural gas, and natural gas liquids across the United States. On November 7, Truist downgraded the company stock to Hold from Buy, setting a price target of $43, down from $49, following the company’s better-than-expected results and in-line guidance.
According to the analyst, the revised EBITDAX trading multiple and free cash flow yield suggest limited upside potential for the stock. While the company continues to indicate a significant inventory of assets, the analyst believes the company needs to expand its inventory to compete among the top large-cap exploration and production companies.
It is noteworthy that Devon Energy (NYSE:DVN) has made a deliberate decision to focus investments on its core assets in the Delaware Basin to boost productivity. This move has proven successful, with the company initially projecting production of 650,000 barrels of oil equivalent per day (BOED) for the year. However, by August, management revised this estimate upwards to a range of 677,000 BOED to 688,000 BOED.
As of November, the target was further increased to between 811,000 BOED and 830,000 BOED, reflecting a significant rise of 110,000 BOED from the acquisition of assets in the Williston Basin. This focus on improving productivity in the Delaware Basin has yielded clear results, with production from this region, reaching 488,000 BOED in the third quarter of 2024, and accounting for 67% of company-wide volumes.
4. Motorola Solutions, Inc. (NYSE:MSI)
Number of Hedge Fund Holders: 48
Cramer called Motorola Solutions, Inc. (NYSE:MSI) stock great, saying:
“That stock is incredible and I should have profiled a long time ago. I kept waiting for it to pull back and it just hasn’t, you know. They have like no competitors in this public safety space that they’re in. I think it’s a great stock.”
Motorola Solutions (NYSE:MSI) delivers public safety and enterprise security solutions, offering a range of devices, infrastructure, software, and services for communications, video security, and mobile workforce management. In an interview on Bloomberg TV, CEO Greg Brown reflected on how the business climate might change with the upcoming administration of President-elect Donald Trump.
Brown indicated that the new administration would be beneficial to companies like Motorola Solutions, which are already performing well. He pointed out that Trump’s strong support for law enforcement, along with his views on reducing crime and his promise to increase the number of border agents to secure the U.S.-Mexico border, could present further opportunities for Motorola.
Additionally, Trump’s proposed reduction in the corporate tax rate and a likely favorable environment for mergers and acquisitions were seen as advantageous for the company’s growth prospects. Motorola Solutions (NYSE:MSI) has placed a significant emphasis on mergers and acquisitions as a key aspect of its future strategy. Brown mentioned that while acquisitions are important, any future deals would likely be small-scale, referred to as “tuck-ins,” rather than large acquisitions. He emphasized that such decisions would depend on the opportunities available and the price at which they could be secured.
3. Amphenol Corporation (NYSE:APH)
Number of Hedge Fund Holders: 69
Cramer likes Amphenol Corporation (NYSE:APH) but cautioned not to buy shares all at once. Here’s what Mad Money’s host had to say:
“I do think that this is a terrific stock. Here’s what you do when you have a great stock like that and you’ve followed it. Let’s say you wanna have a 100 shares. Buy 25 now. You get a lot of crazy things that happen. Maybe you get a market-wide sell, you buy 25 more and then if it doesn’t come in, you can buy more. But I don’t want you to buy it all at once because then if it goes down, you’ll feel like this is a mug’s game and then you’ll leave the market entirely.”
Amphenol (NYSE:APH) is involved in designing, manufacturing, and marketing a wide range of electrical, electronic, and fiber optic connectors, along with related products. The company’s strategy aims to drive growth by developing advanced technologies for customers, supported by market and geographic diversification and an active acquisition program to strengthen its position in key markets.
In line with these efforts, the company completed the acquisition of Lütze Europe in early October. Lütze Europe, a well-established provider of harsh environment cable and cable assembly solutions, generates approximately $100 million in annual sales and primarily serves the high-technology industrial market.
This acquisition, alongside the previously acquired Lütze US business, will be incorporated into its Harsh Environment Solutions segment. Furthermore, Amphenol (NYSE:APH) is in the process of acquiring the OWN and DAS businesses from CommScope, with the transaction expected to close in the first quarter of 2025.
2. Freeport-McMoRan Inc. (NYSE:FCX)
Number of Hedge Fund Holders: 74
Discussing copper stocks like Freeport-McMoRan Inc. (NYSE:FCX), Cramer said:
“I don’t like the copper stocks and copper doesn’t yield a lot here, 1.36. I don’t like Freeport-McMoRan. I just don’t wanna own, I don’t wanna own them. I mean, you know, their time has come and gone.”
Freeport-McMoRan (NYSE:FCX) is involved in the extraction of mineral resources across North America, South America, and Indonesia. The company primarily focuses on exploring copper, gold, molybdenum, silver, and various other metals. According to S&P Global on November 6, Donald Trump’s victory in the U.S. presidential election caused a drop in copper prices, primarily due to the prospect of high tariffs, potential rollbacks of energy transition policies, and a strengthening U.S. dollar.
Ole Hansen, head of commodity strategy at Saxo Bank, mentioned on November 6 that “the risk of China tariffs and attempts to kill the [Inflation Reduction Act] are likely to weigh on prices, especially copper.” Analysts predict that tariffs could dampen global growth and reduce demand for metals, which would put downward pressure on industrial metal prices.
Colin Hamilton, a commodities analyst at BMO Capital Markets, stated that the tariffs could hinder growth and delay progress on metals-intensive net-zero goals, particularly due to the absence of viable alternatives to China’s technological dominance in energy transition technologies.
However, in the short term, Hansen believes copper prices could rebound following the sharp decline on November 6, as any new tariffs are likely to take several months to be implemented. He added, “But, overall, the global economy will hold its breath.”
1. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 136
Cramer likes Uber Technologies, Inc. (NYSE:UBER) and its CEO as he said:
“I would buy Dara Khosrowshahi and I would buy Uber. Periodically, you get these chances. It’s really incredible when you get ’em.”
Uber (NYSE:UBER) develops technology for mobility, delivery, and freight services, connecting consumers with transportation options, facilitating deliveries from various retailers, and managing a digital logistics platform for shippers and carriers. The stock has seen a significant recovery as the challenges posed by the pandemic began to ease. The company continued to grow, particularly in the food delivery sector.
In 2023, the company achieved profitability, marking a significant shift from its earlier years of heavy investment and expansion. This milestone was partly driven by the company’s decision to exit less profitable international markets and divest from non-core business divisions, focusing more on its primary services.
In a recent interview with the Financial Times, Uber’s (NYSE:UBER) CEO, Dara Khosrowshahi, shared the company’s ambitious vision for the future. He explained that the company aims to become the platform that powers the movement of people and goods across the globe, regardless of the mode of transportation. Khosrowshahi stated that Uber’s goal is to “wire up every single vehicle that moves.”
This includes not only Uber cars but also taxis, buses, two-wheelers, and even tuk-tuks in developing markets such as India. The company is working to integrate a wide variety of transport options, aiming to create a seamless experience for users wherever they are.
While we acknowledge the potential of Uber Technologies, Inc. (NYSE:UBER) 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 UBER but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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