In this article, we present the list of the 5 stocks that Jim Cramer recommends to sell. If you want to read our comprehensive analysis of Jim Cramer’s history, investment philosophy, and hedge fund performance, go directly to Jim Cramer Recommends Selling These 10 Stocks.
5. Okta, Inc. (NASDAQ:OKTA)
Number of Hedge Fund Holders: 52
Okta, Inc. (NASDAQ:OKTA) is another software stock Jim Cramer is bearish on. The identity and access management company posted a net loss of $29 million in the fiscal fourth quarter, compared to a $48 million net income in the same quarter last year. In January, Cramer had said that investors won’t be willing to buy Okta, Inc. (NASDAQ:OKTA) on the back of the promising growth as currently, the market is moving away from growth stocks towards “tangible companies that make real things and generate real profits.”
Mad Money stock screener shows that Cramer has a Sell rating on Okta, Inc. (NASDAQ:OKTA) as of March 3.
The market rotation towards value stocks is clearly reflected in hedge fund movements. As of the end of the fourth quarter, 52 funds had stakes in Okta, Inc. (NASDAQ:OKTA), significantly down from 62 funds a quarter earlier.
4. Virgin Galactic Holdings, Inc. (NYSE:SPCE)
Number of Hedge Fund Holders: 24
Richard Branson’s Virgin Galactic Holdings, Inc. (NYSE:SPCE), once a darling of growth investors and Reddit’s WallStreetBets, has been taking a beating over the past few weeks. The stock is down a whopping 68% over the past six months. Jim Cramer said in the “lightning round” of his program that while he believes space is the ‘final frontier,” he doesn’t think Virgin Galactic Holdings, Inc. (NYSE:SPCE) is an “investible frontier” as of now. Jim Cramer recommends selling Virgin Galactic Holdings, Inc. (NYSE:SPCE) as of March 4.
3. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 70
Investors are watching AT&T Inc. (NYSE:T) as the company is set to host its investor and analyst day and give some key business updates. Jim Cramer said he will be listening to the call but remains skeptical. Cramer grilled the company in the following words:
“This is a company with uniquely terrible management — we’re talking ‘Wall of Shame’ bad — and I have no desire to touch it.”
On the other hand, Morgan Stanley’s Simon Flannery is bullish on AT&T Inc. (NYSE:T) stock as the analyst said the upcoming spin-off of its shares for the Warner Bros. Discovery deal will unlock value in communications.
Several elite hedge funds had stakes in AT&T Inc. (NYSE:T) as of the end of the fourth quarter. Some notable of these funds include DE Shaw, Ken Griffin’s Citadel, and Israel Englander’s Millennium Management.
Weitz Investment Management, an investment management firm, published its “Hickory Fund” fourth quarter 2021 investor letter and mentioned AT&T Inc. (NYSE:T). Here‘s what the fund said:
“After several quarters of pandemic-induced outsized growth, new broadband connection growth has slowed for U.S. cable operators. This slower growth has coincided with a renewed push by competitors like Verizon and AT&T to offer high-speed data (either via wireless connects or by building new fiber-optic networks).”
2. Tilray, Inc. (NASDAQ:TLRY)
Number of Hedge Fund Holders: 20
Tilray, Inc. (NASDAQ:TLRY) is a US-based cannabis company whose stock is down about 60% over the past six months. Jim Cramer said the following about the cannabis industry and Tilray, Inc. (NASDAQ:TLRY) stock:
“The pot industry is a very, very tough industry, not unlike gambling. So, I’m not there.”
Tilray, Inc. (NASDAQ:TLRY) recently said it agreed to buy about $211 million of HEXO’s (HEXO.TO) debt. Canaccord Genuity upgraded both stocks on the back of the deal. According to the agreement, Tilray, Inc. (NASDAQ:TLRY) will acquire more than $200 million worth of debt issued by Hexo (HEXO) with the right to convert them into nearly 37% of Hexo outstanding common shares at a conversion price of C$0.90.
At the end of the fourth quarter of 2021, 20 hedge funds had stakes in Tilray, Inc. (NASDAQ:TLRY), compared to 16 funds in the previous quarter.
1. Trex Company, Inc. (NYSE:TREX)
Number of Hedge Fund Holders: 28
Trex Company, Inc. (NYSE:TREX) is a Virginia-based company that makes wood-alternative composite decking, railing, and other outdoor items made from recycled materials. The stock is down 32% over the last six months. Jim Cramer recently said that Trex Company, Inc. (NYSE:TREX) failed to perform in their earnings and that’s why he’d avoid the stock.
“… the earnings per share for the actual quarter was terrible. So the answer is ‘no thank you.’”
For the fourth quarter, Trex Company, Inc. (NYSE:TREX)’s EPS came in at $0.55, beating the estimates by $0.02. Revenue in the period jumped 33% to reach $304 million, beating the consensus by $1.36 million.
Hedge funds are also loading up on the stock. At the end of the fourth quarter, 28 funds had stakes in Trex Company, Inc. (NYSE:TREX), compared to 21 funds a quarter earlier. Charles Montanaro’s Montanaro Asset Management is a leading shareholder in the company with a $69.5 million stake.
Wasatch Global Investors, an investment management firm, published its “Wasatch Core Growth Fund” fourth quarter 2021 investor letter and mentioned Trex Company, Inc. (NYSE:TREX). Here‘s what the fund said:
“Trex Co., Inc. (TREX) was also a large contributor. The company is a manufacturer and seller of high-performance, low-maintenance composite (non-wood) decking and accessories. Trex has continued to take market share from traditional suppliers of wood products, which have shorter lifespans and require more upkeep than composites. While the stock price can be volatile, the key factor for us is that the company has excellent prospects for intermediate- to long-term growth. In other words, we believe the Trex story is more about market-share dominance than about cyclical demand. Recently, the company reported strong growth in revenues, margins and earnings. Moreover, Trex has completed a major expansion of facilities to meet higher demand, and an even larger expansion has been announced. These expansions increase our confidence that the size of the market for composite products will grow significantly and that Trex will continue to take share for years on end.”
You can also take a look at Warren Buffett’s Performance in 2021: 10 Best Stock Picks and 10 ESG Dividend Stocks to Buy.
