This article presents an overview of the Jim Cramer Recommended Selling These 5 Stocks. For a detailed overview of such stocks, read our article, Jim Cramer Recommended Selling These 12 Stocks.
5. Coherent Corp (NASDAQ:COHR)
Number of Hedge Fund Investors: 34
Optical materials company Coherent Corp (NASDAQ:COHR) was one of the stocks Jim Cramer was recommending to sell last year. Cramer acknowledged that Coherent Corp (NASDAQ:COHR) had strong product but said Coherent was a sell because it was not making money.
Over the past six months Coherent Corp (NASDAQ:COHR) shares have lost about 19% in value.
In November Coherent Corp (NASDAQ:COHR) posted fiscal first quarter results. Adjusted EPS in the quarter came in at $0.16, beating estimates by $0.04. Revenue in the quarter fell 22.2% year over year to $1.05 billion, meeting estimates.
4. Catalent Inc (NYSE:CTLT)
Number of Hedge Fund Investors: 37
Healthcare company Catalent Inc (NYSE:CTLT) ranks 4th in our list of the stocks Jim Cramer was recommending to sell last year. In November 2023, Cramer recommended investors to “stay away” from the stock. Over the past six months, Catalent Inc (NYSE:CTLT) shares have lost about 4% in value.
As of the end of the third quarter of 2023, 37 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Catalent Inc (NYSE:CTLT). The most significant stakeholder of the firm during this period was Eric Bannasch’s Cadian Capital which owns a $242 million stake in Catalent Inc (NYSE:CTLT).
3. AT&T Inc. (NYSE:T)
Number of Hedge Fund Investors: 52
Jim Cramer in July recommended investors to “walk away” from AT&T Inc. (NYSE:T) as he thought AT&T Inc. (NYSE:T) was as “poorly managed as any company I’ve ever seen in my lifetime.”
In August 2023, Jim Cramer called the telecom company stock “horrendous.”
Over the past six months, AT&T shares have gained about 7%. A total of 52 hedge funds tracked by Insider Monkey had stakes in AT&T Inc. (NYSE:T).
Miller Value Income Strategy made the following comment about AT&T Inc. (NYSE:T) in its Q3 2023 investor letter:
“Our third-largest holding at quarter end was AT&T Inc. (NYSE:T), a leading provider of communications and connectivity services in the US. At $15/share, the stock trades at the same price it did almost thirty years ago. The share price is much less interesting to us in relation to where it has traded in the past than in relation to how much cash the company generates and what management is doing with it. At just over 6x earnings, the stock trades near its lowest price-to-earnings (P/E) multiple ever, also representing close to its largest-ever P/E discount to the stock market. The business converts most of its earnings to free cash flow, implying a forward free cash flow yield north of 15%. Just under half of free cash flow is going toward the dividend (7.5% yield), while much of the balance is going to debt paydown. In other words, if the stock does not fall below its lowest-ever valuation, investors clip a rock-solid 7.5% in cash, while owning a growing portion of a very steady business as management reduces debt outstanding. A discounted cash flow model will suggest that intrinsic value for shares begins with a “2,” suggesting the stock is undervalued on an absolute basis. The lack of volatility in the underlying fundamentals also makes it unique when compared to many other things we own, which reduces the probability of permanent capital impairment and argues for a significant weight in the portfolio.
AT&T looks particularly attractive when compared to some of the larger names dominating the S&P 500. Compare the stock to Apple, for instance, whose revenues and profits are likely to shrink this year, even as it trades at 29x this year’s earnings estimate. The ongoing return to rationality and capital accountability, along with extreme valuations in the megacap tech stocks, have us more excited about our portfolio’s prospects than we can remember for quite some time. As always, we remain the largest investors and welcome any questions or comments.”
2. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Investors: 61
Jim Cramer in September 2023 said Verizon Communications Inc. (NYSE:VZ) is “dead money” and recommended investors to stay away from the stock. Cramer said that stocks should not be bought only for their dividends. Cramer also said Verizon Communications Inc. (NYSE:VZ) shares were “going nowhere.”
Over the past six months, Verizon Communications Inc. (NYSE:VZ) shares have gained about 5.28%.
As of the end of the third quarter of 2023, 61 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Verizon Communications Inc. (NYSE:VZ).
Ariel Global Fund made the following comment about Verizon Communications Inc. (NYSE:VZ) in its Q3 2023 investor letter:
“By comparison, global communications and technology leader, Verizon Communications Inc. (NYSE:VZ), continued to weigh on performance following an article in the Wall Street Journal outlining concerns on lead cable lines posing a significant public health threat. Although the lead covered cable lines remain an overhang on shares, we find Verizon’s valuation to be compelling. The company delivered a solid earnings report, with subscriber and financial metrics in-line or ahead of consensus. Management also reiterated full year guidance and noted it may exceed its outlook for free-cash-flow. From a competitive and financial standpoint, we view Verizon to be among one of the best positioned telecoms in the world. Looking forward, we expect free cash flow to grow significantly in the years ahead as the company moves past the secular peak in 5G capital spending.”
1. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Investors: 84
Jim Cramer last year said his charitable trust sold Johnson & Johnson due to consistent legal troubles of the company. Cramer said he had initially believed Johnson & Johnson (NYSE:JNJ) had acted in good faith and was not aware of the harmful ingredients in its baby talc powder. But persistent lawsuits and lost legal battles forced Cramer to hit eject on the stock.
Johnson & Johnson (NYSE:JNJ) stock is down by about 1% over the past six months.
As of the end of the third quarter of 2023, 84 hedge funds tracked by Insider Monkey had stakes in Johnson & Johnson (NYSE:JNJ).
ClearBridge Large Cap Value Strategy made the following comment about Johnson & Johnson (NYSE:JNJ) in its Q3 2023 investor letter:
“The health care space provided some opportunities in the quarter, as we increased our exposure to medical device company Becton, Dickinson as well as large cap pharmaceutical company Johnson & Johnson (NYSE:JNJ). Johnson & Johnson recently spun out its consumer health care business, becoming a more focused yet broadly diversified pharmaceutical and medtech company.”
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