We recently published a list of Jim Cramer’s Latest Lightning Round: Top 10 Stocks. Since Ally Financial Inc (NYSE:ALLY) ranks 8th on the list, it deserves a deeper look.
Jim Cramer in a latest program on CNBC said that the market has already priced in the expected positive comments from the Fed Chair Jerome Powell at the Jackson Hole event in Wyoming. Cramer said some bulls might be hoping for an indication of “multiple rate cuts,” but that’s “not gonna happen.”
Cramer talked about the latest 8-day winning streak of the market which he called a “resurrection.” He said that almost “anything” during these days went up. Even the companies with “bad” results went up because investors thought they would improve once the Fed begins to cut interest rates, Cramer said.
“But that was then, this is now. Since the winning streak ended we are starting to get into what I call the buyer’s remorse phase of this move. Stocks have had a nice run based on nothing more than hope are now rolling over hard.”
Jim Cramer also pointed to the possible events in the coming months that could keep the markets depressed:
“Maybe the Fed is already too late and the economy will get real ugly or maybe traders are beginning to fear the possibility of a democratic sweep in November which could lead to higher corporate tax rate, bad for earnings. And a potential witchhunt for price gouging in the aisles of the supermarket and the drug stores.”
For this article we picked 10 stocks Jim Cramer talked about during his latest programs on CNBC. 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).
Pachai Leknettip/Shutterstock.com
Ally Financial Inc (NYSE:ALLY)
Number of Hedge Fund Investors: 47
A caller recently asked Jim Cramer about Ally Financial Inc (NYSE:ALLY) during his program on CNBC. Cramer instantly hit the “buy, buy, buy” button, saying this call a “really simple” one.
Cramer agreed with the caller’s thesis that the auto and home loans company is better positioned to benefit from the upcoming rate cuts.
Ally Financial Inc (NYSE:ALLY) recently reported quarterly results, beating estimates on earnings and revenue. Net interest margin in the quarter was strong, reaching 3.30%, up 14 basis points sequentially, as it began lowering deposit rates. Deposit costs dropped by 7 basis points to an average of 4.21% during the quarter. With higher-yielding CDs maturing and continued pricing reductions, this positive trend is expected to persist, especially since Ally Financial Inc (NYSE:ALLY) deposit rates remain competitive compared to other banks. The company is also expected to pass these reductions through to its deposit rates following rate cuts.
For the full year the company now expects a net interest margin at 3.3%, up from 3.25-3.3% previously, with an exit rate of 3.45-3.50%.
Overall, Ally Financial Inc (NYSE:ALLY) ranks 8th on Insider Monkey’s list titled Jim Cramer’s Latest Lightning Round: Top 10 Stocks. While we acknowledge the potential of Ally Financial Inc (NYSE:ALLY), 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 ALLY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These Stocks.
Disclosure: None. This article is originally published at Insider Monkey