We recently published a list of Jim Cramer Stocks: 10 Latest Calls. Since Nucor Corp (NYSE:NUE) ranks 6th on the list, it deserves a deeper look.
Jim Cramer in a new program on CNBC talked about the latest pullback on Tuesday, when the market snapped its 8-day winning streak. Cramer said that the hopes of rate cuts were buoying the markets all along. According to Cramer, when a company posted a good quarter, its stock roared. If a company reported a bad quarter, investors assumed it was the “last bad quarter” because the Fed was about to start cutting rates.
“In other words, companies could do no wrong. But not today. Today we had a bit of a reckoning and dose of reality being thrown in our faces.”
Cramer talked about two home improvement companies that recently reported their quarters. According to Cramer, these results show that the consumer is still extremely cautious, and high mortgage rates and inflation is keeping spending on big-ticket items depressed.
“Wall Street is maybe expecting not good news from the Fed on Friday and therefore a slowdown, a bad slowdown,” Cramer said.
Jim Cramer said the market is “rational” again and the optimism needed to be “tempered” before the next rally.
For this article we watched several latest programs of Jim Cramer aired on CNBC and picked 10 stocks he’s recommending investors to buy or sell. With each company, we have mentioned the 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).
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Nucor Corp (NYSE:NUE)
Number of Hedge Fund Investors: 40
A disappointed caller recently asked Jim Cramer whether he should sell Nucor because of its losses.
“Oh no don’t sell Nucor. In the end Nucor is a cyclical company. Sometimes we want these big steel companies to be something other than they can be,” Cramer said.
“When the Fed starts cutting interest rates the first stop people are going to reach for, including me for my charitable trust, will be Nucor. So please do not sell the stock,” Cramer added.
Morgan Stanley upgraded Nucor Corp (NYSE:NUE) to “Overweight” from “Equal Weight” with a $176 price target. The bank highlighted that despite strong earnings growth and cash generation expected in 2025 and 2026, the stock has underperformed its peers.
Analyst Carlos de Alba noted that Nucor currently trades at a discount to Steel Dynamics (STLD) on an EV/EBITDA basis for 2025, while its P/E premium is below its five-year average. De Alba believes this discount is unjustified given Nucor’s higher expected earnings growth.
De Alba also favors Nucor Corp (NYSE:NUE) over Cleveland-Cliffs (CLF), citing expected subdued auto production in the second half of 2024, which he thinks will limit upside for flat steel prices and constrain Cliffs’ earnings recovery.
With over 50 years of consecutive dividend increases, steel company Nucor Corp (NYSE:NUE) is one of the best stocks that can benefit from a Trump presidency, according to Wolfe Research. Nucor Corp (NYSE:NUE) has been on an acquisition spree lately, expanding into new growth areas. In April, Nucor Corp (NYSE:NUE) bought data center infrastructure firm Southwest Data Products, Inc. (SWDP) for $115 million.
With the deal Nucor Corp (NYSE:NUE) entered the AI infrastructure market where specific solutions to maintain cool temperatures at data centers are in high demand. To address this market, Nucor Corp (NYSE:NUE) is creating a dedicated group.
Overall, Nucor Corp (NYSE:NUE) ranks 6th on Insider Monkey’s list titled Jim Cramer Stocks: 10 Latest Calls. While we acknowledge the potential of Nucor Corp (NYSE:NUE), 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 NUE 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.