We recently compiled a list of the Jim Cramer’s List of Stocks that Finished Dead Last. In this article, we are going to take a look at where Moderna, Inc. (NASDAQ:MRNA) stands against the other Jim Cramer stocks that finished dead last.
In a recent episode of Mad Money, Jim Cramer examined market trends of the third quarter. He first discussed that while high interest rates and a cash-strapped consumer typically signal good fortune for dollar stores, this time was different.
Dollar stores are grappling with substantial challenges, primarily stemming from inflation. Cramer emphasized that rising prices have made it increasingly difficult for these retailers to maintain their signature one-dollar pricing model.
Moreover, he explained that historically, dollar stores are expected to decline when the economy improves, and that happens when the Federal Reserve begins to cut interest rates. However, a more pressing issue is that dollar stores are now facing more savvy consumers who have discovered better deals at larger retailers.
Cramer went on to discuss the necessity for the stock market to be driven by new companies, rather than relying on established leaders primarily associated with artificial intelligence, which are now experiencing diminished momentum. He said:
“You want to find a bunch of former market darlings? I want you to take a look at the bottom of the S&P 500 for this quarter.”
He remarked on the irony of the situation, suggesting that investors have spent considerable time believing that simply investing in anything linked to AI would guarantee success. He pointed out that recent market activity has shown that backing the wrong AI-related stock could lead to significant losses.
He cautioned that the days of going on autopilot with the Magnificent Seven are over. Those stocks had remarkable runs earlier in the year, but Cramer insisted that it is now essential to welcome new players into the market to reach new highs.
Lastly, he added:
“One thing’s certain, Wall Street, the complex of analysts, money managers, corporate finance traders, they missed out big this quarter, didn’t they? They still act like the new losers will be winners soon enough while the new winners are all one-hit wonders. I say, dream on. This move could be here to stay.”
Our Methodology
For this article, we compiled a list of 5 large stocks that underperformed during the third quarter and were mentioned by Jim Cramer during his episode of Mad Money on October 1. We listed the stocks in descending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 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).
A scientist surrounded by vials and beakers in a modern laboratory, proudly displaying a vaccine.
Moderna, Inc. (NASDAQ:MRNA)
Number of Hedge Fund Holders: 39
Moderna, Inc. (NASDAQ:MRNA) is a biotechnology company that specializes in the development of messenger RNA therapeutics and vaccines for a variety of diseases. Its portfolio includes vaccines for respiratory illnesses like COVID-19 and influenza, as well as those targeting latent infections such as HIV.
Additionally, the company is involved in creating cancer treatments, including personalized vaccines, and has therapeutic options for rare diseases and pulmonary conditions.
During his show, Cramer talked about the company and said that the stock was “down nearly 44% in the third quarter.” He went on to say:
“Moderna simply hasn’t been able to follow up with its game-changing COVID vaccine with anything big enough to move the needle.”
Recently, Moderna (NASDAQ:MRNA) announced plans to reduce its expenses by approximately $1.1 billion by 2027, a decision driven by the decline in demand for its COVID-19-related products.
To navigate this transition, the company will pause development on certain projects within its pipeline and discontinue others to better manage research and development costs. The target for R&D spending has been adjusted to a range of $3.6 billion to $3.8 billion in 2027, down from a previously forecasted $4.8 billion by the end of the current year.
Moderna (NASDAQ:MRNA) CEO Stephane Bancel highlighted that this strategic shift will involve scaling back on some studies and putting a hold on the latent product portfolio, which pertains to viruses that can remain dormant in the body for extended periods before potentially causing serious health issues later on.
Overall MRNA ranks 2nd on our list of Jim Cramer stocks that finished dead last. While we acknowledge the potential of MRNA 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 MRNA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.