Jim Cramer, host of Mad Money, recently discussed a possible looming energy crisis in the U.S. that has taken many by surprise. He warned that if the country doesn’t act swiftly, it will soon be overwhelmed by an energy shortfall. According to Cramer, we need to tap into every available energy source including natural gas, wind, geothermal, and hydroelectric power. However, he stressed that the most critical energy source right now is nuclear power. He added:
“Crisis comes down to the fact that we had no real industrial growth in this country for decades so we haven’t had to build much energy infrastructure. Now all of a sudden these data centers start coming online like the ones that will be part of Stargate, the Oracle, SoftBank, OpenAI project… And these data centers consume insane amounts of electricity. It’s a level of demand that nobody saw coming. So after years where we spent more time decommissioning power plants and building new ones, we suddenly gotta go back into growth mode.”
READ ALSO 8 Stocks on Jim Cramer’s Radar and Jim Cramer Discussed 9 Stocks for This Week’s Game Plan
Cramer went on to discuss an energy source that many are reluctant to consider: coal. While it may seem counterintuitive, he argued that coal could make a comeback in the U.S. energy mix.
“When the president gave his inaugural address on Monday, he declared a national emergency aiming to produce more domestic fossil fuels, including coal. Once the mainstay utility fuel, coal has been phased out year after year after year because it is terrible for the environment. 10 years ago, coal-based fuel was responsible [for] about 33% of electricity. Now it’s fallen to 15%.”
Yet, with the push to decommission nuclear plants, and the rising cost of natural gas, Cramer suggested that coal might need to be reintegrated into the energy mix. He argued that, despite the environmental drawbacks, the demand for power is now so great that coal’s long decline could be nearing its end.
“Under this president, coal could have… a renaissance. Sure, coal’s time has come and gone, but it will come again because the data center inspired energy crisis really is so pressing that there’s not really a choice anymore. Yes, the demand is that great, [and] we so foolishly mothballed good nuke plants that it wouldn’t surprise me if coal’s long decline may have finally run its course.”
Jim Cramer Recently Shed Light on These 9 Stocks
Our Methodology
For this article, we compiled a list of 9 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on January 22. 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 Shed Light on These 9 Stocks
9. Core Natural Resources, Inc. (NYSE:CNR)
Number of Hedge Fund Holders: N/A
Discussing Core Natural Resources, Inc. (NYSE:CNR) during Mad Money’s episode, Cramer said:
“… Who’s the winner? It’s hard as the coal cohort is made up of companies that mine coal for steel production and others that mine coal for utilities. But the latter has been such a dog for so long that the US companies have tried to merge their way into steel making coal and to lessen exposure in utilities. Peabody Energy and Core Natural Resources are the big ones. I think they’re cheap, but they trade more like steel companies than coal companies.”
Core Natural Resources (NYSE:CNR) focuses on producing and selling bituminous coal, primarily for power generation, industrial, and metallurgical uses. The company also offers coal export terminal services through the Port of Baltimore. Bloomberg recently reported that shares of U.S. coal producers saw an increase following comments by President Donald Trump during a video address at the World Economic Forum in Davos, Switzerland.
Core Natural Resources (NYSE:CNR) stock saw a rise of around 2% after the address. In his address, Trump emphasized his commitment to reshaping U.S. energy policy with greater emphasis on oil and natural gas, while also expressing strong support for coal. He declared, “Nothing can destroy coal. Not the weather, not a bomb,” calling it “a great backup” as a power source.
8. Alliance Resource Partners, L.P. (NASDAQ:ARLP)
Number of Hedge Fund Holders: 5
Cramer mentioned Alliance Resource Partners, L.P. (NASDAQ:ARLP) during the episode, and here is what Mad Money’s host had to say:
“… then there’s another company called Alliance Resources Partners LP. It’s a master limited partnership that’s the largest coal producer in the eastern United States. Incredibly profitable company sells at less than nine times earnings as befits a slow to no growth enterprise and it’s not undiscovered because coal prices have actually done well thanks to overseas demand.
All that said, this market embraces anything energy, that means coal will soon be back and it makes a lot more sense now that coal is a champion in the White House. If you hear coal mentioned by the president and it’s picked up… Alliance Resources will be the one people will grab because it’s a master limited partnership. It has a terrific 10% yield, but the yield’s only that high because people think that the payout needs to be cut. May well be true.”
Alliance Resource (NASDAQ:ARLP) is a diversified natural resource company that produces and markets thermal and metallurgical coal. It also owns and leases oil and gas mineral interests, as well as coal reserves, and operates a coal loading terminal. During the first nine months of 2024, it sold 24,904 tons and produced 25,305 tons. During that time, the company generated nearly $1.61 million in coal sales.
However, total revenues for the period decreased by 4.3%, reaching $1.86 billion compared to $1.94 billion in 2023, mainly due to lower coal sales and transportation revenues, though higher oil and gas royalties and other revenues helped offset the drop. Alliance Resource’s (NASDAQ:ARLP) net income for the 2024 period was $344.5 million, or $2.64 per basic and diluted limited partner unit, down from $514.7 million, or $3.93 per unit, in 2023. The decrease in net income was primarily driven by the decline in revenues and an increase in total operating expenses.
7. The Honest Company, Inc. (NASDAQ:HNST)
Number of Hedge Fund Holders: 19
Cramer said that he cannot recommend The Honest Company, Inc. (NASDAQ:HNST) at this point as the company does not make money.
“Look, I totally get it. I get the fascination with it and when they make money, I will recommend it. Now, that means that someone might say, Jim, it was at six bucks, you kept me out of it until it went to $10. I don’t care. I only wanna recommend companies in 2025 that are making money.”
Honest Company (NASDAQ:HNST) produces and sells a range of products, including diapers, wipes, skincare, personal care, household items, wellness products, and baby clothing and bedding. Laura Champine of Loop Capital recently expressed concerns about the company’s fundamentals, particularly regarding potential tariffs on China under the incoming Trump administration. Since the company’s popular baby wipes are produced there, higher shipping costs could negatively impact profitability.
In her opinion, relocating production to U.S. suppliers is not a feasible solution. Despite these worries, Champine highlighted several positive aspects of Honest Company’s (NASDAQ:HNST) business, including its strong relationship with major retailer Amazon, which drives significant sales.
Moreover, the company raised its full-year 2024 projections for both revenue and adjusted EBITDA. It now expects revenue to grow by a high single-digit percentage compared to 2023. For adjusted EBITDA, the revised outlook is in the range of $20 million to $22 million, up from the previous forecast of $15 million to $18 million as of Q2 2024.
6. Sportradar Group AG (NASDAQ:SRAD)
Number of Hedge Fund Holders: 24
A caller asked Cramer whether they should buy, hold, or take the money and run when it comes to Sportradar Group AG (NASDAQ:SRAD). Here’s what Mad Money’s host had to say:
“No, no. I like this company. I think this company, you know, it’s now turned profitable. It’s doing a lot of really good things. It is not expensive, it’s not expensive on its growth rate. Okay? So I think you’re into something good. It’s speculative, but I like it.”
Sportradar (NASDAQ:SRAD) provides sports data services to the sports betting and media industries, offering software, data, content, and live streaming solutions. In October 2024, when Cramer discussed the company, he said:
“I’ve gotta tell you that there are some things here I really like. Unlike so many other members of the IPO class of 2021, these guys actually make money. In fact, they’ve been profitable since coming public… Using Sportradar’s latest revenue and EBITDA guidance for 2024, both lines will have more or less doubled over the past three years. Put it another way, Sportradar’s revenue has increased at a 24% compound annual growth rate in these past three years and its profitability has grown even faster.
What’s driving the strength? Okay, in the past few years, there’ve been several rounds of rights renewals, which have proved to be pretty expensive for Sportradar… The cost of these rights has risen substantially over the past few years, which has put a lid on Sportradar’s earnings power for a long time. Now though, there’s just one big deal left and that’s with Major League Baseball.”
Cramer noted that after finalizing its current negotiations, the company should experience stability and be able to focus on improving its margins. He pointed out that Wall Street expects significant earnings growth for the company in 2025 and 2026, with analysts highlighting this potential.
Cramer also mentioned that while Sportradar’s (NASDAQ:SRAD) financial performance has improved over the past three years since going public, the company’s outlook is now even more favorable. Cramer commented that with much of its costly bidding for sports league rights behind it, the company is well-positioned for future growth, which could drive its stock upward.
5. Peabody Energy Corporation (NYSE:BTU)
Number of Hedge Fund Holders: 25
Cramer noted that Peabody Energy Corporation (NYSE:BTU) is cheap but also mentioned that the company trades like a steel company rather than a coal company.
“… Who’s the winner? It’s hard as the coal cohort is made up of companies that mine coal for steel production and others that mine coal for utilities. But the latter has been such a dog for so long that the US companies have tried to merge their way into steel-making coal and to lessen exposure in utilities. Peabody Energy and Core Natural Resources are the big ones. I think they’re cheap, but they trade more like steel companies than coal companies.”
Peabody Energy (NYSE:BTU) is a coal mining company involved in the extraction, preparation, and sale of thermal and metallurgical coal. In April 2024, Cramer mentioned the company as he remarked, “No, I’m not a coal guy…I do not want to own BTU, and I think it should be sold.”
Meanwhile, on January 5, Jefferies analyst Christopher LaFemina reduced the price target for Peabody Energy (NYSE:BTU) stock to $26 from $30 while maintaining a Buy rating on the stock. The firm has adopted a more cautious stance on the near-term outlook for the metals and mining sector, citing cyclical factors and a belief that consensus estimates may be at risk of being too high.
However, Jefferies believes it is too late to downgrade ratings and remains focused on buying “preferred” miners and steel producers following recent market weaknesses. The firm expects stronger demand to emerge in 2026 and 2027, which should result in significantly higher prices for key commodities and for the shares of many companies.
4. Comfort Systems USA, Inc. (NYSE:FIX)
Number of Hedge Fund Holders: 35
Talking about Comfort Systems USA, Inc. (NYSE:FIX), Cramer said:
“HVAC, whether it be Trane, whether it be Carrier, if you got HVAC, it’s the thing. I mean I know it’s weird because it’s very much like plastics in the movie The Graduate. But like if someone were to tell me right now, a young kid walked by and say, Jim, I’m thinking about going in the stock market. You know what I’d tell him? HVAC.”
Comfort Systems (NYSE:FIX) offers a wide range of mechanical and electrical services, including installation, maintenance, repair, and renovation of HVAC, plumbing, electrical, and other building systems. As of the first nine months of 2024, the company reported a 23% growth in same-store revenue compared to the same period in the previous year.
However, management acknowledged that the company may face more challenging revenue comparisons in the upcoming quarters, suggesting that growth in the fourth quarter of 2024 is likely to align closely with the growth experienced during the third quarter.
Looking further ahead, Comfort Systems (NYSE:FIX) expects continued revenue growth in 2025, forecasting a rise in the range of high single digits to low double digits. Moreover, CEO Brian Lane highlighted the company’s growing backlog and strong booking performance. He emphasized that despite the company completing projects at a record pace, its backlog remains significantly higher than in previous years.
3. Wingstop Inc. (NASDAQ:WING)
Number of Hedge Fund Holders: 39
Cramer showed disgruntlement toward Wingstop Inc. (NASDAQ:WING) as he pointed out that management did not give him any reason to hold onto the stock.
“Wingstop, when they reported last did not give me an explanation about why they didn’t do well and so therefore I went off on them. Now I have to tell you, I don’t personally dislike them. I have liked the product. But when you come on the show, when you talk good, you know, and say good things and I say good things about you and then you don’t give me the information I needed to say why I should continue to like you, then I have to turn on you. It’s just what I do.”
Wingstop (NASDAQ:WING) is a restaurant chain known for its specialty in serving classic and boneless wings, tenders, and chicken sandwiches. In November 2024, Cramer criticized the company’s management for failing to acknowledge a significant earnings shortfall during its third-quarter earnings call. He said:
“Wingstop dwelled on the good, not blowout, same-store sales and didn’t even mention the out and out earnings shortfall. 88 cents, looking for 96.”
Cramer noted that Wall Street dislikes not only big misses but also when management tries to downplay them, which led to Wingstop’s stock drop. It should be noted that the company reaffirmed its guidance for the fiscal year 2024, predicting around 20% growth in domestic same-store sales.
Wingstop (NASDAQ:WING) also updated its projected SG&A expenses, now expecting them to fall between $117.5 million and $118.5 million, compared to its earlier estimate of $114 million to $116 million. Furthermore, it revised its depreciation and amortization estimate to approximately $19 million, slightly higher than the initial range of $18 million to $19 million.
2. AppLovin Corporation (NASDAQ:APP)
Number of Hedge Fund Holders: 51
Cramer acknowledged that AppLovin Corporation (NASDAQ:APP) stock “does not quit” and has the tendency to go higher unless a competitor with lower pricing steps in.
“Oh man, I’m hate loving AppLovin. I cannot believe the stock goes up every day… This thing does not quit. It doesn’t know how to quit. And all I can tell you is unless someone else comes in directly and says, you know what, we do what they do and we charge half the price, this stock is gonna keep going up because it is a love stock. I’m gonna give you two for, I’m gonna say the same thing about Palantir. Palantir and AppLovin should go get married.”
AppLovin (NASDAQ:APP) is a company that offers software solutions designed to improve marketing and monetization strategies. Cramer recently expressed his belief that 2025 will be the year when venture capitalists begin backing alternatives to AppLovin. Because of this, he stated that he cannot recommend the stock at its current price, which is nearly 60 times this year’s projected earnings. However, he added:
“But try telling that to the true believers who set it up 713% last year, another 5.5% today, which frankly I find utterly ridiculous. I mean enough AppLovin already.”
1. GE Vernova Inc. (NYSE:GEV)
Number of Hedge Fund Holders: 89
Cramer has been adulating GE Vernova Inc. (NYSE:GEV) for a while now. During the episode, he commented:
“… GE Vernova is pulling forward, plans to reopen nuclear plants at considerable costs. You’ve heard about the reopening of one of the Three Mile Island reactors. Now there’s talk about finishing two nuclear plants in South Carolina that were stopped because of hideous cost overruns. These plants, initiated in 2008, were so hard to build in 2017, they just kind of threw up their hands and gave up. Now Santee Cooper is soliciting bids due in May to rebuild these state-owned plants, a fortune, maybe they get it, but nukes are still pie in the sky people.”
GE Vernova (NYSE:GEV) is an energy company that offers products and services for the generation, transmission, and storage of electricity around the world. Recently discussing the outlook for nuclear plant construction in the U.S., Cramer noted that while the company is a key player in the industry, it is much more cautious than the promoters pushing for nuclear energy. However, Cramer enthusiastically noted during an episode of Squawk on the Street:
“And he (CEO Scott Strazik) goes, okay, you see [inaudible] five gigawatts of nuclear power in the US between existing facilities and restarting existing fleets of approximately sixty-five plants. Five gigawatts would power approximately four million US homes. They’re talking about South Carolina, they’re talking about doing a Diablo Canyon. They’re going to Japan! Where Japan is recommissioning after Fukushima. To London. It is a nuclear renaissance and it is now…. [on South Carolina] And that’s going to be them. They have the capability of bringing these back online. And it’s cause of the data centers. This is a real good story.”
While we acknowledge the potential of GE Vernova Inc. (NYSE:GEV) 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 GEV but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article was originally published at Insider Monkey.
