We recently compiled a list of the Jim Cramer’s Game Plan: 13 Stocks in Focus. In this article, we are going to take a look at where DICK’S Sporting Goods, Inc. (NYSE:DKS) stands against the other stocks in Jim Cramer’s game plan.
Jim Cramer, the host of Mad Money, recently discussed the crucial events on Wall Street this week and emphasized the importance of watching upcoming earnings reports. He pointed out that the Thanksgiving period often brings a surge of optimism to the market. However, Cramer expressed concern that this enthusiasm is getting out of hand.
“Thanksgiving tends to unleash the animal spirits of the market in a very positive way. I’m no killjoy… but there’s getting to be a little too much speculation for me and if we don’t deal with it, if I don’t talk about it, it’s gonna become a problem.”
READ ALSO Jim Cramer’s Lightning Round: 9 Stocks in Spotlight and Jim Cramer on Nvidia Plus Other Stocks
Cramer also turned his attention to Bitcoin, commenting on the growing buzz around the cryptocurrency. He expressed his hope that Bitcoin would finally reach the $100,000 mark so the conversation could move on. According to Cramer, the surge in Bitcoin’s price is largely tied to speculation fueled by the President-elect’s idea of creating a strategic Bitcoin reserve. He noted that many people who had missed out on Bitcoin when it was trading lower are now justifying their purchases at these higher levels.
“As long as it’s legal, I’m all in but understand, I have nothing to offer on Bitcoin’s $100,000 price tag, nor does anybody else, by the way, except to say this: This is what happens when there are more buyers than sellers.”
Turning to broader market trends, Cramer acknowledged that stock trading tends to slow down during the rest of the holiday week. However, he highlighted that Wednesday would bring the latest personal consumption expenditures (PCE) report from the government. This report, a key inflation measure for the Federal Reserve, could give a clue as to whether the Fed will consider another rate cut before the year ends.
Cramer noted that the economy has been running hotter than the Fed would prefer, which has led to speculation that a rate cut in December might not be necessary. The situation is particularly challenging, he explained, because long-term interest rates, including mortgage rates, have been rising since the Fed began its rate cuts. Normally, these rates would decrease in such an environment, so if the PCE report shows a cooler inflation reading, it could fuel another rally. On the other hand, if the report is hot, Cramer suggested it could trigger a downturn in some of the more speculative stocks.
“If you have huge profits in the month of November, could you do me a favor? I would show a little thanks next week and take something off the table in your most risky positions.”
Our Methodology
For this article, we compiled a list of 13 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on November 22. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 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 customer in a specialty concept store wearing a full outfit of apparels and sports gear.
DICK’S Sporting Goods, Inc. (NYSE:DKS)
Number of Hedge Fund Holders: 35
Cramer called DICK’S Sporting Goods, Inc. (NYSE:DKS) a “category killer” and said:
“Now we’ve seen a bunch of retailers’ reports not sweating numbers yet in many cases, their stocks still roared. Meanwhile, others like Target get clubbed like baby seals. It’s treacherous to start buying these now because many of these stocks have run mightily in the last few days. Take that DICK’s Sporting Goods. Now this one jumped eight points just today. Is that good because it’s a sign that numbers will be great or is it bad…? I’m betting it’s actually the former because DICK’s is a category killer and there aren’t that many of these left… I think DICK’s can pull it off.”
DICK’S Sporting Goods (NYSE:DKS) is an omni-channel retailer offering a wide range of sporting goods, including equipment, apparel, footwear, and accessories. The company has focused on enhancing its inventory in recent months, reporting an 11% increase in inventory levels at the close of the second quarter compared to the same period in the prior year.
Management explained that this decision to invest in inventory was a deliberate move to focus on key, differentiated products and categories, which are expected to support growth through the second half of 2024 and into early 2025. For fiscal 2024, the company raised its earnings per share guidance to a range of $13.55 to $13.90, up from its previous forecast of $13.35 to $13.75 per share.
This adjustment represents a modest increase of approximately 18 cents at the midpoint. Additionally, DICK’S Sporting Goods (NYSE:DKS) maintained its overall sales guidance, expecting sales to fall between $13.1 billion and $13.2 billion, which aligns with previous estimates and does not exceed analyst projections. However, the company did raise its outlook for comparable sales growth, now anticipating an increase of between 2.5% and 3.5%, up from the prior forecast of 2% to 3%.
Overall DKS ranks 11th on our list of the stocks featured in Jim Cramer’s game plan. While we acknowledge the potential of DKS 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 DKS 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.