We recently published a list of Jim Cramer October Portfolio: Top 10 Stocks to Buy and Sell. Since AST SpaceMobile Inc (NASDAQ:ASTS) ranks 9th on the list, it deserves a deeper look.
Jim Cramer in a latest program commented on the latest stronger-than-expected jobs report, calling it “good news” and expressed surprise at how the stocks “roared” on the report.
“For years, we have been taught that when buying yields go up, stocks go down. Ever since the Fed gave us that double rate cut last month, we have been afraid that they have been acting so decisively. Something might be wrong with the economy—something they knew about, but we didn’t.”
Jim Cramer was also surprised by bank stock gains. He said that these stocks probably rose because a strong employment situation means fewer bad loans. Cramer also said we might be heading to “no landing at all.”
“People have a collective sigh of relief that we weren’t headed for a crash landing. They held onto their stocks with both hands.”
For this article we watched several latest programs of Jim Cramer and picked 10 stocks he’s talking about. With each company we have mentioned its number of hedge fund investors. 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).
Copyright: bluebay / 123RF Stock Photo
AST SpaceMobile Inc (NASDAQ:ASTS)
Number of Hedge Fund Investors: 15
AST SpaceMobile Inc (NASDAQ:ASTS) is another stock Jim Cramer believes has run too much. When asked about the stock in a recent program on CNBC, Cramer said it’s “too hot.”
Texas-based AST SpaceMobile aims to provide cellular broadband coverage globally through a network of large, high-powered satellites in low Earth orbit, offering connectivity even in remote areas. The company is currently assembling and testing its first generation of BlueBird satellites. However, the stock trades at a steep price-to-book ratio of 29.74, far above sector peers, raising concerns for investors.
As a growth company, it faces significant risks, including market overvaluation and competition in the mobile satellite services space, which is already highly competitive. While the company claims to be the “first and only” cellular broadband provider from space, it will face rivals as the business matures. The high global demand it anticipates may not materialize, as technology evolves rapidly.
Losses are expected to persist in the near term, with revenue forecast at $4.3 million for this year and a loss of $1.14 per share. By 2025, revenue is projected to reach $148 million, though losses will likely continue at 63 cents per share.
While profitability is not expected until 2028, the stock might not be a good option for those looking for early returns.
Overall, AST SpaceMobile Inc (NASDAQ:ASTS) ranks 9th on Insider Monkey’s list titled Jim Cramer October Portfolio: Top 10 Stocks to Buy and Sell. While we acknowledge the potential of First AST SpaceMobile Inc (NASDAQ:ASTS), 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 ASTS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These Stocks.
Disclosure: None. This article is originally published at Insider Monkey.