Jim Cramer in a latest program said the “bulls” want the economy to slow down, they want rate cuts as well as a strong demand so that “their companies” won’t have to worry about the yield curve and macroeconomic situation. Cramer highlighted that all of this is confusing, as it’s not possible to have a weaker economy and yet see companies make a lot of money. Cramer also pointed to the latest data showing slowing manufacturing activity. The Institute for Supply Management’s manufacturing purchasing managers index fell to 48.7 in May from 49.2 in April, while analysts were expecting the index to jump to 49.5. Cramer said that the economic activity in the manufacturing sector contracted for the 18th time in the last 19 months. Cramer said the new orders contraction in May was a “little over frightening.”
Talking about the energy sector, Cramer said that he’d buy oil and gas stocks as the economy would sooner or later begin to get back to normal. Cramer also said that it’s surprising to see many retailers, including Dick’s Sporting Goods, GAP and Best Buy, performing exceptionally well. Cramer also talked about a Wall Street analyst who “double upgraded” Best Buy shares, saying the company “might be the biggest beneficiary” of the AI PCs boom. Cramer said he agrees with this thesis.
For this article we watched several latest programs of Jim Cramer and picked 11 stocks he’s bearish on. With each stock we have mentioned hedge fund sentiment. 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).
11. Beyond Meat Inc (NASDAQ:BYND)
Number of Hedge Fund Investors: 16
Jim Cramer was recently asked about Beyond Meat Inc (NASDAQ:BYND) during his program on CNBC. Cramer said:
“No, don’t want to own that. Way too risky.”
Instead, Jim Cramer recommended Hormel Foods to the questioner, saying the stock is a “better play.”
Beyond Meat Inc (NASDAQ:BYND) recently came in the limelight after the return of Roaring Kitty on Twitter, which is giving yet another push to meme stocks. However, the stock is still down about 28% over the past one year. Last month, Beyond Meat Inc (NASDAQ:BYND) posted Q1 results which missed estimates on both EPS and revenue. Adjusted EPS in the period came in at -$0.72, missing estimates by $0.06. Revenue in the quarter fell 18% year over year to $75.6 million, missing the consensus forecast by $0.12 million.
Beyond Meat Inc (NASDAQ:BYND) is experiencing a declining demand across the globe. While gross margins are expected to improve amid price increases and cost optimization, analysts believe higher prices would further dent the already fledgling demand. For the second quarter, Beyond Meat Inc (NASDAQ:BYND) is expects its revenue to come in between $85 and $90 million, which would be a 14% decline at the midpoint.
A total of 16 hedge funds tracked by Insider Monkey reported owning stakes in Beyond Meat Inc (NASDAQ:BYND) as of the end of the first quarter of 2024, down from 18 hedge funds in the previous quarter.
10. AMC Entertainment Holdings Inc (NYSE:AMC)
Number of Hedge Fund Investors: 17
A caller recently asked Jim Cramer about AMC Entertainment Holdings Inc (NYSE:AMC). Cramer replied:
“I want you to sell, take your capital out.”
Cramer said that the balance sheet of AMC Entertainment Holdings Inc (NYSE:AMC) “is not good” and the box officer numbers are “horrendous.”
AMC Entertainment Holdings Inc (NYSE:AMC) shares flew to the moon (temporarily) following the return of “Roaring Kitty” on Twitter. However, the stock is down 21% for the year, as AMC Entertainment Holdings Inc (NYSE:AMC) warned of a weaker Q2 as strikes slashed the number of film releases in the period. Attendance in AMC Entertainment Holdings Inc (NYSE:AMC) theaters fell 5.8% to 30.5 million in the first quarter. Data from Yahoo Finance shows that the Wall Street expects AMC Entertainment Holdings Inc (NYSE:AMC) to report a negative growth of 217.00% per annum over the next five years.
9. TEGNA Inc (NYSE:TGNA)
Number of Hedge Fund Investors: 28
Virginia-based media company TEGNA Inc (NYSE:TGNA) is one of the stocks Jim Cramer thinks you should not buy. When asked about TEGNA Inc (NYSE:TGNA) in a program on CNBC last week, Cramer said the following:
“This is a TV station. I just don’t care about anything involving linear TV. This is not where I want to be. I’m sorry.”
Cramer might be bearish on the stock, but TEGNA Inc (NYSE:TGNA) shareholders are rejoicing these days as TEGNA Inc (NYSE:TGNA) last month announced a whopping 9.8% increase in its quarterly dividend. The new dividend would be $0.125 per share. However, analysts are skeptical of TEGNA Inc’s (NYSE:TGNA) long-term growth amid cord-cutting and loss of subscribers. In the short term, though, TEGNA Inc (NYSE:TGNA) is expected to remain strong. It owns 64 local affiliates across 51 markets. Analysts are also expecting TEGNA Inc (NYSE:TGNA) to benefit from the rise in political ad spending this year ahead of elections.
Based on its 2025 EPS estimate of $2.13, Tegna has a forward P/E of 7, much lower than the sector median of 12.32. One-year average analyst price estimate for TEGNA Inc (NYSE:TGNA), according to data from Yahoo Finance, is $19.13, which presents an upside potential of 28% from the current levels.
8. Hawaiian Electric Industries, Inc. (NYSE:HE)
Number of Hedge Fund Investors: 31
Jim Cramer is extremely bearish on electric utilities company Hawaiian Electric Industries, Inc. (NYSE:HE). When asked about the stock recently during his program on CNBC, Cramer said, “Come on! you don’t want to be in Hawaiian Electric.. No!”
Cramer also said that you can buy any other utility except Hawaiian Electric Industries, Inc. (NYSE:HE).
“I don’t care what utility you are in other than that one.”
31 hedge funds who owns stakes in the utility company disagree with Cramer. Billionaire Cliff Asness of AQR Capital Management owns a $48 million stake in Hawaiian Electric Industries, Inc. (NYSE:HE).
7. Crown Castle Inc (NYSE:CCI)
Number of Hedge Fund Investors: 43
Texas-based telecom company Crown Castle Inc (NYSE:CCI) is one of the stocks Jim Cramer is recommending investors to stay away from. Cramer said in a program earlier this month that there’s “no growth” in Crown Castle Inc (NYSE:CCI) and Crown Castle Inc (NYSE:CCI) is “incredibly poorly managed.”
“I’m going to have to say stay away. I don’t want you near that stock.”
This is a change from Cramer’s earlier view where he was recommending investors to hold the stock as he thought Crown Castle Inc (NYSE:CCI) was bottoming. In April, Cramer had recommended investors to hold Crown Castle Inc (NYSE:CCI) because of its high dividend yield. He, however, also said at that time that Crown Castle Inc (NYSE:CCI) was “mismanaged,” adding that Crown Castle Inc (NYSE:CCI) can “bottom here” because of its over 6% dividend yield.
Analysts expect Crown Castle Inc’s (NYSE:CCI) adjusted FFO to see a whopping 8% contraction this year. According to data from Yahoo Finance, Crown Castle Inc (NYSE:CCI) is expected to contract by 10.10% in 2025. Crown Castle Inc (NYSE:CCI) is trying to cut its heavy debt load. It started 2024 with $22.8 billion in net debt. However, Crown Castle Inc (NYSE:CCI) has $6 billion in available liquidity. Debt maturities through 2025 are worth only $2 billion. While some believe the market is already pricing in Crown Castle Inc’s (NYSE:CCI) weaknesses and applaud its current P/AFFO of 14, which is low based on historical levels, Crown Castle Inc (NYSE:CCI) bears believe the company will have to do a lot to turn the tables around.
6. Palantir Technologies Inc (NYSE:PLTR)
Number of Hedge Fund Investors: 45
Jim Cramer recently said that he finds it “very tough to understand what they (Palantir) do for the governments.”
“So, therefore, I am no longer going to say that that’s a stock to own. I can’t figure out what they do.”
A total of 45 hedge funds out of the 919 funds tracked by Insider Monkey reported owning stakes in Palantir Technologies Inc (NYSE:PLTR) as of the end of the first quarter of 2024. The biggest stakeholder of Palantir Technologies Inc (NYSE:PLTR) during this period was D. E. Shaw which had a $310 million stake in Palantir Technologies Inc (NYSE:PLTR).
Palantir Technologies Inc (NYSE:PLTR) recently fell despite beating Q1 estimates and boosting guidance. For the full year Palantir Technologies Inc (NYSE:PLTR) expects revenue between $2.677 billion and $2.689 billion, above the consensus estimate of $2.68 billion and higher than its previous estimated range of $2.652 billion to $2.668 billion.
Palantir Technologies Inc (NYSE:PLTR) is trading at a high P/E multiple of 170, which has alarmed many. However, Palantir Technologies Inc (NYSE:PLTR) bulls believe Palantir Technologies Inc’s (NYSE:PLTR) consistent contract wins from the government and AI-related growth catalysts justify this multiple. Analysts are bullish on Palantir Technologies Inc’s (NYSE:PLTR) AI platform (AIP), which helps companies and governments in decision making based on AI technologies. In the first quarter alone, Palantir Technologies Inc (NYSE:PLTR) saw a 16% YoY increase in government contracts. US government revenue jumped 12% year over year.
Palantir Technologies Inc (NYSE:PLTR) has increased its U.S. commercial sector growth outlook to 45% from an initial estimate of 40%. Palantir is expected to report sales growth of 20% next year according to Wall Street estimates. The stock is trading at 54X its 2025 EPS estimate of $0.39, which is justified based on the strong growth trajectory.
But if you are worried about valuations, the market is presenting several AI opportunities at attractive levels. If you are looking for an AI stock that is as promising as PLTR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Carillon Scout Mid Cap Fund stated the following regarding Palantir Technologies Inc. (NYSE:PLTR) in its fourth quarter 2023 investor letter:
“Second was another technology stock, Palantir Technologies Inc. (NYSE:PLTR), which rallied earlier in the quarter before pulling back. Sentiment remains positive on Palantir as it has successfully rolled out a new marketing effort called “boot camps” where customers can demo the company’s new artificial intelligence platform (AIP) product. These events have been popular with potential clients, and in many cases it has been reported that customers can develop an artificial intelligence use case in just a few hours. The stock rallied as some expected this successful marketing effort could translate into faster revenue growth. Palantir also landed the coveted National Health Services account in the UK, long rumored, but the delay in the award had weighed on investor sentiment.”
5. Applovin Corp (NASDAQ:APP)
Number of Hedge Fund Investors: 51
Applovin Corp (NASDAQ:APP) is another stock Jim Cramer is saying away from because of his overall bearish view on the enterprise software industry. However, Cramer said that Applovin Corp (NASDAQ:APP) recently reported a solid quarter.
SaltLight Capital stated the following regarding AppLovin Corporation (NASDAQ:APP) in its fourth quarter 2023 investor letter:
“AppLovin Corporation (NASDAQ:APP) operates at the intersection of game advertisers, publishers, and over one billion game players, functioning as a pivotal monetisation enabler in the free-to-play gaming ecosystem.
One of AppLovin’s strengths lies in its primary use of contextual data for ad matching. While this type of data may not offer the high precision of first-party data like Meta’s, it remains invaluable, especially in environments where traditional data signals are weaker. Contextual targeting becomes increasingly relevant in areas like connected TV (CTV), where direct user tracking is more challenging.
Connected TV, which includes devices (smart TVs, consoles, or sticks) that stream TV content, represents a flourishing opportunity set for performance-based digital advertising. As more households move away from traditional satellite or terrestrial TV in favour of internet-connected devices, the potential for monetising this viewership grows. However, advertising on CTV is still operating in the same seventy-year-old way as linear TV – with brand advertising as the dominant part of the funnel…” (Click here to read the full text)