On Monday, Jim Cramer discussed the insights of chartist Bob Lang, who expressed an optimistic view about a number of subscription-based stocks. Mad Money’s host said:
“Of course, the one thing we don’t have in this environment is any sense of certainty and when the fundamentals are uncertain, I like to fall back on the technicals and that’s why tonight, we’re going off the chart with the help of Bob Lang.”
Cramer pointed out that in today’s unpredictable market, where the fundamentals often lack clarity, he tends to rely on technical analysis and this is where Lang’s expertise comes in. Cramer explained that Lang, who founded ExplosiveOptions.net and authored Know Your Options, is known for his ability to read charts and identify promising stocks.
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The focus of Lang’s analysis was on consumer-oriented companies that can still perform well, even when economic conditions slow down. According to Lang, businesses with strong subscription models are particularly appealing in such an environment. Cramer echoed the sentiment, saying he has always been a fan of subscription-based models and fully agreed with Lang’s perspective.
Cramer also turned his attention to several technical indicators that can help predict potential changes in a stock’s direction, specifically the Moving Average Convergence/Divergence (MACD). He explained that it is a tool that technicians, like Lang, often rely on. Cramer explained that the MACD is a powerful momentum indicator, capable of identifying shifts in a stock’s trajectory before they occur. By acting on these early signals, investors can position themselves ahead of potential price movements. Another important tool Cramer mentioned was the Chaikin Money Flow, which tracks the buying and selling pressure of a stock, providing further insight into a company’s potential performance.
Our Methodology
For this article, we compiled a list of 5 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on March 24. 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 Recently Talked About These 5 Subscription Stocks
5. Spotify Technology S.A. (NYSE:SPOT)
Number of Hedge Fund Holders: 101
Cramer shared that Lang observed Spotify Technology S.A. (NYSE:SPOT) recently tested its 50-day moving average, only to bounce back with a solid increase in volume. He went on to say:
“Then the stock’s MACD line has already made that crossover that we like so much. See that right there? They’re all about to do this. That’s one of the most reliable signs of the business. Lang says Spotify is now building a base at a higher level.
It started trading sideways, but in this view that often means the next move will be in the same direction as the previous move, which means it’s going higher. Spotify’s Chaikin Money Flow, not bad, right? Still positive. In fact, it’s been positive since November. Even the big sell didn’t scare the big money away from Spotify. With the stock’s recent rebound, it broke a key downtrend line and rose above its ceiling resistance on healthy volume… Lang sees it, the big institutions are still buying this thing and he wouldn’t be surprised if this $600 stock makes a run at $700. Good story. I remember it was like in the $300. That’s amazing.”
Spotify (NYSE:SPOT) provides audio streaming services through subscriptions, allowing users to enjoy a broad range of music and podcasts.
4. Roku, Inc. (NASDAQ:ROKU)
Number of Hedge Fund Holders: 37
Cramer noted that Lang is a fan of Roku, Inc. (NASDAQ:ROKU), but he pointed out that the company’s stock chart is volatile and difficult to interpret, with Lang considering it more of a speculative investment. He added:
“I would say it’s completely speculative. But from its highs in February to its lows earlier this month, Roku plunged from just under $105 to $66 in change. However, the stock looks like it’s put in a bottom about a week ago… and it’s rebounded all the way to the low $80s…. The thing is, Roku just started to rebound. Lang points out that the Chaikin Money Flow down at the bottom is still pretty darn bearish. It’s down below that. That’s not good at all and very ugly.
… Now, Lang expects an upside breakout with the stock only ripping back to the recent highs near $105. If the stock lingers in the current range between $75 and $80, this one would be a good one for you. Okay? It’s a good sign. It might be a good option. Good one for call options too, if you’re really, you know, a little bit more into it. Lang’s not ready to give you an all-clear here, but if Roku does trade sideways for a few weeks, you might want to get ready to pounce.”
Roku (NASDAQ:ROKU) operates a streaming platform offering a wide range of content, along with advertising and subscription services. It also sells streaming devices, Roku-branded TVs, smart home products, and audio accessories, while engaging in licensing arrangements with service providers.
