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)
4. Estee Lauder Companies Inc (NYSE:EL)
Number of Hedge Fund Investors: 51
Jim Cramer in a latest program called Estee Lauder Companies Inc (NYSE:EL) a “horrendous stock.” Cramer said that he’s decided not to buy more of this stock unless he sees “anything positive, anything!”
“It’s the worst stock that we own now.”
Estee Lauder Companies Inc (NYSE:EL) saw a jump in hedge fund sentiment in the first quarter, as 51 hedge funds reported owning stakes in Estee Lauder Companies Inc (NYSE:EL) as of the end of June, up from 43 funds in the previous quarter.
Baron Durable Advantage Fund stated the following regarding The Estée Lauder Companies Inc. (NYSE:EL) in its fourth quarter 2023 investor letter:
“The Estée Lauder Companies Inc. (NYSE:EL) is a leading manufacturer, marketer, and retailer of prestige beauty products globally. Shares continued underperforming in the fourth quarter after management cut the company’s outlook for the fiscal year ending 6/30/2024. This downward revision was mainly driven by a worsening outlook in China, business disruptions in Israel and other parts of the Middle East, and worsening F/X headwinds. Estee Lauder’s disproportionate exposure to the Chinese consumer and the travel retail channel in Asia relative to peers continues to place pressure on both growth and margins. We decided to exit our position and reallocate to ideas in which we have greater conviction.”
3. Viking Therapeutics Inc (NASDAQ:VKTX)
Number of Hedge Fund Investors: 52
When asked about California-based biotech company Viking Therapeutics Inc (NASDAQ:VKTX) in a latest program, Jim Cramer said:
“I even like the Vikings more than I like Viking Therapeutics. That says something because it ain’t that good.”
Instead of Viking Therapeutics Inc (NASDAQ:VKTX), Cramer recommended the questioner to pile into Eli Lilly, a stock he’s been recommending for months.
“Step your game up, partner!,” Cramer urged the questioner.
Viking Therapeutics Inc (NASDAQ:VKTX) is a weight loss stock which is why it’s been in the news lately. Earlier this year the stock jumped after Viking Therapeutics Inc’s (NASDAQ:VKTX) GLP-1/GIP receptor agonist VK2735 led to a mean body weight reduction of up to 15% over 13 weeks in a Phase 2 trial called VENTURE. However, the stock recently fell after Swiss pharma company Roche said its dual GLP-1/GIP receptor agonist, CT-388, caused roughly 19% average weight loss in a Phase 1 trial. In March, the stock jumped after Viking Therapeutics Inc (NASDAQ:VKTX) said up to 57% of patients who received oral tablet VK2735 lost 5% of their body weight.
Analysts believe being a small player in the weight loss industry, Viking Therapeutics Inc (NASDAQ:VKTX) could be a takeover target of a major company looking to compete with giants like Eli Lilly and Novo Nordisk.
Carillon Eagle Small Cap Growth Fund stated the following regarding Viking Therapeutics, Inc. (NASDAQ:VKTX) in its first quarter 2024 investor letter:
“Viking Therapeutics, Inc. (NASDAQ:VKTX) is a biotechnology company focused on obesity and nonalcoholic steatohepatitis (NASH), a chronic liver disease affecting a large population worldwide. The stock took off after the company unveiled results from a study of its lead injectable drug for obesity. It demonstrated strong overall weight reduction compared to the leading weight loss drug, tirzepatide. Investors have been excited about the potential size of the glucagon-like peptide 1 (GLP-1) agonist market, and it was an impressive achievement for a smaller, independent lab to make such a meaningful breakthrough. Additionally, the oral version of the drug also appears to have very strong weight reduction over a four-week period.”
2. Bristol-Myers Squibb Co (NYSE:BMY)
Number of Hedge Fund Investors: 57
A caller recently asked Jim Cramer about his thoughts on Bristol-Myers Squibb Co (NYSE:BMY), referring to Bristol-Myers Squibb Co’s (NYSE:BMY) almost 6% dividend yield. Cramer said that if you want to get “paid to wait,” Pfizer is a better choice because with Bristol-Myers Squibb Co (NYSE:BMY) “it’s going to be a long wait.”
Bristol-Myers Squibb Co (NYSE:BMY) shares have lost about 36% over the past one year. The stock is getting clobbered amid fears of sales declines following patent expirations. Bristol-Myers Squibb Co’s (NYSE:BMY) cancer drug Revlimid has seen severe sales declines after it went off-patent in 2022. Bristol-Myers Squibb Co’s (NYSE:BMY) anti-stroke drug Eliquis is going off-patent in 2026. To offset the potential declines, Bristol-Myers Squibb Co (NYSE:BMY) is going on a buying spree, acquiring smaller companies to expand its portfolio. Bristol-Myers Squibb Co (NYSE:BMY) bought Karuna Therapeutics (neuroscience drugs), RayzeBio, Inc.( adiopharmaceutical therapeutics) and Mirati Therapeutics (oncology drugs).
Earlier this month, Bristol-Myers Squibb Co (NYSE:BMY) jumped after the company said the FDA-authorized cancer therapy Krazati (adagrasib) reached its main goal in a late-stage trial for lung cancer.
Some analysts believe Bristol-Myers Squibb Co (NYSE:BMY) could use AI for drug discovery to expand its portfolio. According to data from McKinsey, generative AI could produce $60 billion to $110 billion annually in value for the pharmaceutical industry. However, our research shows there are many pure-play AI stocks currently trading at attractive valuations. If you are looking for an AI stock that is as promising as Microsoft but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Based on its 2025 EPS estimate of 6.91, the stock is trading at a forward P/E of just 6, much lower than the industry median of 19. Its P/S ratio stands at 1.85, compared to the industry average of 3.61. However, over the next five years unless Bristol-Myers Squibb Co (NYSE:BMY) could expand its portfolio rapidly and do something about its patents, the company is expected to report a negative growth rate of -4.45%. That’s why Cramer said it’d take a long time before this investment could pay off.
Ariel Global Fund stated the following regarding Bristol-Myers Squibb Company (NYSE:BMY) in its fourth quarter 2023 investor letter:
“Biopharmaceutical company, Bristol-Myers Squibb Company (NYSE:BMY), also underperformed in the quarter on mixed earnings results and a reduction in guidance due to a delay across several new product launches. Although the company’s mid- to long-term targets remain intact, management expects a transition period before the company returns to top-tier growth. In our view, many of the new drugs represent either the first-in-class (the first molecule approved by the FDA) or best efficacy opportunities and believe the new product portfolio should outperform expectations over time. Meanwhile, management remains bullish on its maturing pipeline and reaffirmed it will continue to seek business development through bolt-on acquisitions and licensing deals.”
1. Snowflake Inc (NYSE:SNOW)
Number of Hedge Fund Investors: 73
Jim Cramer said that he’s worried about stocks like Snowflake Inc (NYSE:SNOW) amid his overall bearish view on the enterprise software sector. While Cramer noted that Snowflake Inc (NYSE:SNOW) is not a pure enterprise software stock, he thinks the money is going to “other sectors” and it’s a “collateral damage situation.” He said he’d be staying away from Snowflake Inc (NYSE:SNOW).
If you are looking for an AI stock that is as promising as Microsoft but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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