We recently published an article titled Was Jim Cramer Right About These 12 Stocks? In this article, we are going to take a look at where Howmet Aerospace Inc. (NYSE:HWM) stands against the other stocks.
Back then, Cramer was focused on the impact of future rate cuts and how different stocks would react. He argued that the market had become simple:
“Stocks that benefit from rate cuts get bought. Stocks that don’t benefit get sold.”
At that time, Cramer pointed to McDonald’s as an example of a rate-cut winner, despite the company having weak earnings at the time, saying:
“This market doesn’t care that it’s doing badly. It just treats the Golden Arches as a rate-cut winner.”
Meanwhile, he appeared rather bearish around big tech at the time. He warned against buying the “Magnificent 7”, saying that while they had thrived despite rate hikes, they wouldn’t necessarily benefit as rates came down. Here’s how he put it back then:
“For years now, the market has been rallying on companies that don’t need to borrow money, that don’t need rate cuts. But the flip side is that they won’t really benefit as rates come down.”
Tech stocks were under pressure at that time, and Cramer saw no short-term relief:
“For tech, the watchword is three words my staff loves to say: get out now.”
Cramer expressed some interesting opinions in that particular show. Let’s see how each prediction unfolded 7 months later.
Our Methodology
For this article, we compiled a list of 12 stocks that were discussed by Jim Cramer during the episode of Mad Money on July 30, 2024. We then calculated their performance from July 30th, 2024, market close to February 14th, 2025, market close. We have also included the hedge fund sentiment for the stocks, which we sourced from Insider Monkey’s Q3 2024 database of over 900 hedge funds. The stocks are listed in the order that Cramer mentioned them.
Note: This article covers Jim Cramer’s commentary from July 30, 2024, and does not account for any changes in his opinions regarding the stocks mentioned. Therefore, the commentary should not be mistaken for his latest opinions on any of the stocks that are mentioned.
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).
Engineers examining stress tests of an aircraft engine, working to make sure its ready for flight.
Howmet Aerospace Inc. (NYSE:HWM)
Number of Hedge Fund Investors: 58
Cramer saw Howmet Aerospace Inc. (NYSE:HWM) as a clear winner in the rate-cut environment. He said:
“Both RTX and Howmet are screaming higher because, as the team from Howmet mentioned on their conference call, aerospace is indeed cyclical.”
Cramer pointed out that the aerospace industry relies on borrowed money to finance airplane purchases, making it highly sensitive to interest rate changes.
“The industry benefits from lower rates because businesses buying airplanes often do it with borrowed money, so rate cuts are vital for them. They help travellers too, so there will be a lot of demand for planes from airlines.”
His view was that Howmet Aerospace Inc. (NYSE:HWM) was benefiting from strong tailwinds, and with interest rates expected to drop, the stock had more room to run.
And he was spot on. 7 months later and the stock is up 42% since he made that call.
Overall HWM ranks 5th on our list of the stocks Jim Cramer recently discussed. While we acknowledge the potential of HWM 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 HWM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
