We recently published an article titled, Jim Cramer’s Latest Lightning Round: 12 Stocks to Watch. In this article, we are going to take a look at where Halliburton Company (NYSE:HAL) stands against other stocks discussed by Jim Cramer during the latest lightning round.
On Tuesday, Jim Cramer, host of Mad Money, shared his thoughts on the market’s recent volatility and offered advice to investors regarding earnings reports. He cautioned against making trades based solely on immediate stock reactions following earnings announcements, as many of these movements might not be justified.
“The absurdity of earnings season has arrived. It didn’t take long, did it? People are already doing stupid things. And you know what? I gotta point them out to you so that you don’t make the same mistakes.”
Cramer emphasized his mission to guide individuals toward becoming more thoughtful investors, rather than impulsive traders. He noted that the Dow Jones Industrial Average dropped 325 points, while the S&P 500 declined by 0.76%, and the Nasdaq Composite fell 1.01%.
Cramer referred to this phenomenon as part of what he calls the quarterly repricing process, which is the earnings season. He explained that, typically, most stocks tend to move in tandem with the S&P 500 unless a significant event alters the market. In the absence of such an event, stock movements are often influenced by external factors that may have only a tenuous connection to a company’s actual future performance. He further clarified his perspective and stated:
“Now, I want to make one thing clear. I’m not saying that everybody’s a moron. I’m saying there are details that inform people are looking for benchmarks we’ve accepted going into earnings. Yet for the first few moments of trading, there’s just obviously oblivious action based on who knows what. It’s definitely not the key metrics. It’s definitely not the homework.”
Ultimately, Cramer described this chaotic trading behavior as a clumsy way for Wall Street to reassess stock prices in relation to their peers, driven by a flurry of parsed headlines during earnings season. He expressed relief that this sort of disorganized trading only occurs four times a year, even as he acknowledged that this is a crucial period when a stock can become detached from the S&P 500.
Concluding his thoughts, Cramer emphasized:
“Yet, if you’re not a professional, you should not be involved in this process. There are so many people playing with so much money, professionals who pay people fortunes to figure this stuff out. Let them fight to set the price. For regular investors like you, trying to trade that initial post-earnings action is just an easy way to lose money, four times a year, like clockwork.”
Our Methodology
For this article, we compiled a list of 12 stocks that were discussed by Cramer during lightning rounds of Mad Money’s episodes on October 14, 15, and 16. 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).
Cramer Says ‘I Wanna Stay Away From Halliburton’
Halliburton Company (NYSE:HAL)
Number of Hedge Fund Holders: 41
While Cramer called Halliburton Company (NYSE:HAL) a great company, he wishes to keep his distance from it.
“Alright, no I, don’t wanna own [it]… I wanna stay away from Halliburton. That’s too bad, it’s a really great company.”
Halliburton (NYSE:HAL) offers a range of products and services for the global energy sector, including services focused on production enhancement, cementing solutions, and comprehensive drilling support. Recently, the company disclosed a cybersecurity incident that came to light on August 21, where unauthorized access to certain systems occurred. The company acknowledged that this breach caused disruptions and limited access to various business applications essential for its operations. Although the attacker managed to extract information from its systems, the company is actively assessing the scope of the breach and determining the necessary notifications.
While the company has incurred expenses related to responding to this incident, it stated that the attack has not materially impacted its financial position or operational results. Nonetheless, it remains aware of the risks associated with such cybersecurity threats. Currently, it is evaluating the specifics of the information that was accessed and is cautious about any potential long-term implications.
On October 14, BofA lowered the price target on Halliburton (NYSE:HAL) to $38 from $40 and maintained a Buy rating in light of the broader market conditions. The analyst informed investors that a slowdown in global oil demand growth, coupled with an oversupply, is likely to create difficulties in 2025 for oil prices and stock selection in the Oilfield Services sector. The firm suggests that the present outlook for global oil supply and demand requires U.S. land oil production to stabilize rapidly, and the analyst has adjusted price targets downward by an average of 6% across the industry.
Overall, HAL ranks 6th on our list of stocks discussed by Jim Cramer during the latest lightning round. While we acknowledge the potential of HAL 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 HAL 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.