We recently published a list of Jim Cramer Praised These 6 Companies’ Exceptional Management. In this article, we are going to take a look at where Palo Alto Networks, Inc. (NASDAQ:PANW) stands against other companies that Jim Cramer praised for their exceptional management.
On Thursday, Jim Cramer, host of Mad Money, pointed out that Wall Street often overlooks the importance of strong leadership in a company, and how a new CEO can significantly impact a company’s valuation, even in the face of broader macroeconomic challenges.
“When we value stocks in this environment, we tend to think of how they’ll fare in the world of rising long-term interest rates… how they perform under the new presidential regime… We care about the sector and how it’s behaving but how about the companies? How about the people who run them?”
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Cramer emphasized that too often, the conversation about the individuals running companies gets sidelined. While not every leadership change leads to success, he believes that in certain situations, the right CEO can make all the difference in driving a company’s growth. He urged viewers to consider how a great leader can transform an entire business, suggesting that investors might want to look beyond the usual sector battles and instead focus on companies with fresh, capable leadership.
He added that the ability of a skilled CEO to steer a company in the right direction is an often overlooked but powerful factor. He commented:
“The transcendence of the enterprise, thanks to the leadership of a great CEO, why not celebrate it? Hey, stop denigrating it at least… It may pay to think bigger instead of just being in the tech battleground out here every day.”
Cramer expressed his frustration with the constant debates surrounding the tech sector, stating that he finds the ongoing arguments tiresome. This, he explained, was part of the reason he wanted to shift the conversation and focus on companies led by new executives. “I’m tired of tech just sitting there and people arguing about it all the time. It’s getting boring to me,” he said.
“So here’s the bottom line: Not all publicly traded companies are hostages to forces beyond their control… Sometimes when you bring in a great new CEO… they can turn around the whole business giving the investors spectacular gains even when tech blinds us like mustard gas.”
Our Methodology
For this article, we compiled a list of 6 stocks that were discussed by Jim Cramer during the episode of Mad Money on January 30. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the third quarter of 2024, 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 cutting-edge computer lab full of IT experts monitoring the security of multiple systems.
Palo Alto Networks, Inc. (NASDAQ:PANW)
Number of Hedge Fund Holders: 64
Cramer discussed how Nikesh Arora turned around Palo Alto Networks, Inc. (NASDAQ:PANW) and increased the company’s value since taking over in 2018.
“Let me give you another one, it’s kind of funny. This one is Nikesh Arora. When he took over at Palo Alto Networks, PANW, a once powerful cybersecurity company that had fallen behind the others, people thought turning this business around was too big a task. At best, he’d just be a deal maker and a so-so one at that. I knew Nikesh is [a] brilliant competitive guy whom I wanted to bank with, which is why we bought the heck outta the stock… Now, Palo Alto had a $19 billion market capitalization when Nikesh took over on June 6th, 2018, it’s now worth $123 billion. He created $104 billion in value.”
Palo Alto Networks, Inc. (NASDAQ:PANW) is a leading cybersecurity firm globally, offering an extensive range of security solutions. Since June 2018, PANW stock has seen a whopping gain of over 460%.
Overall, PANW ranks 4th on our list of companies that Jim Cramer praised for their exceptional management. While we acknowledge the potential of PANW 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 time frame. If you are looking for an AI stock that is more promising than PANW 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.
