We recently published an article titled, Jim Cramer is Talking About These 12 Stocks. In this article, we are going to take a look at where GE Vernova Inc. (NYSE:GEV) stands against the other stocks that Jim Cramer has talked about.
During September 30’s episode of Mad Money, CNBC’s Jim Cramer delved into the previous three months and the market’s events. He identified some positive developments amidst the turbulence in the market.
Cramer highlighted that Dow inched up 17%, the S&P 500 went up 42% while Nasdaq gained 38% during the months. He remarked, “For once, good news was actually good news and interesting.” He went on to say that miracles still happened in the stock market’s third quarter. He pointed out that July, August, and September yielded remarkable returns, even highlighting the typically troublesome month of September, which saw the broader market rising significantly.
Cramer elaborated on the lead-up to the Federal Reserve’s decision to cut rates by 50 basis points. He characterized the economic landscape as having “no landing at all,” explaining that the economy continued to grow, inflation decreased, and unemployment ticked up. He suggested that the central bank laid the groundwork for a significant rate cut, which was the reason that there was no panic on Wall Street after the cut. The former hedge fund manager also praised Federal Reserve Chair Jerome Powell for achieving the challenging feat of a double rate cut without shocking the markets.
Moving on, Cramer talked about how the market’s breadth expanded as well, with many sectors gaining traction beyond the dominant Magnificent Seven tech stocks. He noted that a variety of industries, including banks, utilities, retail, healthcare, housing, and transportation, enjoyed their moment in the spotlight.
As for the upcoming election, he referenced Michael Cembalest of J.P. Morgan Asset Management, who described it as “the most polarized election in 100 years.” Cramer observed that, despite the political drama surrounding the elections, Wall Street remained largely unfazed, even in response to significant events like Vice President Kamala Harris potentially replacing President Biden on the Democratic ticket and the attempted assassination of former President Donald Trump.
Cramer also highlighted a shift in the housing market, pointing out the first signs of relief from formerly soaring inflation figures. He suggested that an increase in available homes could be the breakthrough needed to address this intractable asset class that has resisted price declines.
In terms of international markets, he noted that the Chinese market staged a rally, even in light of dismal economic news, owing some of this movement to government-ordered buybacks and influxes of capital.
Cramer commented on the ongoing speculation about stagflation, particularly concerning oil prices, reminiscent of the oil crisis in 1973. He addressed the ongoing conflict in the Middle East, mentioning that Saudi Arabia had abandoned its unofficial price target of $100 per barrel in favor of increasing production.
While many believe that oil prices could soar at any moment, Cramer expressed skepticism, suggesting that although a spike could still occur due to geopolitical factors, he thinks those fears may be overstated.
Reflecting on the past nine months, he concluded that despite the potential for stagflation, 2024 has surprisingly turned out to be a great year for the stock market, defying expectations.
Our Methodology
For this article, we compiled a list of 12 stocks that Jim Cramer mentioned during his episode of Mad Money on September 30. We listed the stocks in ascending 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).
Jim Cramer Said GE Vernova Inc. (NYSE:GEV) ‘Turned Out To Be An Incredible Mover’
GE Vernova Inc. (NYSE:GEV)
Number of Hedge Fund Holders: 92
In April, General Electric spun off into three parts, which led to the formation of GE Vernova Inc. (NYSE:GEV). While Cramer was initially worried about the company, he recently mentioned that it “turned out to be an incredible mover.”
GE Vernova Inc. (NYSE:GEV) is an energy company focused on providing a wide range of products and services related to electricity generation, transfer, orchestration, conversion, and storage. It operates across the United States, Europe, Asia, the Americas, the Middle East, and Africa.
The company represents the consolidation of General Electric’s power, wind, and electrification sectors, which include gas turbine equipment, onshore and offshore wind turbines, and technologies for grid distribution and power conversion.
Recently, GE Vernova (NYSE:GEV) reaffirmed its financial outlook for 2024. It is now projecting revenue to trend toward the upper range of $34 to $35 billion. The adjusted EBITDA margin is expected to be between 5% and 7%, and the company anticipates free cash flow to fall between $1.3 billion and $1.7 billion.
The outlook is supported by expected growth in the Power and Electrification segments, both of which are expected to reach the higher end of their EBITDA margin guidance. For the third quarter, the company still expects solid year-over-year organic revenue growth.
GE Vernova (NYSE:GEV) has plans for the Power segment and seeks to expand capacity to deliver 70 to 80 heavy-duty gas turbine units annually starting in 2026. It is a significant increase from the current average of about 55 shipments each year.
Given the growing demand for grid equipment, the company forecasts that its Electrification equipment backlog will more than triple by the end of 2024, compared to the $6.4 billion backlog reported at the end of 2022.
Carillon Tower Advisers stated the following regarding GE Vernova Inc. (NYSE:GEV) in its Q2 2024 investor letter:
“GE Vernova Inc. (NYSE:GEV) is a global electric power company that was recently spun out of a much larger industrial conglomerate. The company’s shares performed well in their first quarter as a standalone company, primarily as a result of the increasing outlook for power demand growth, both domestically and abroad. We believe GE Vernova is well positioned to capitalize on this growing trend across its various products and services, but most notably within its large-scale gas turbine equipment and related services, as well as in its high-voltage electrical transmission products.”
Overall, GEV ranks 2nd on our list of stocks Jim Cramer is talking about. While we acknowledge the potential of 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: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.
