We recently published a list of Jim Cramer’s Latest Portfolio Heading Into 2025: Top 10 Stocks. In this article, we are going to take a look at where Eaton Corporation plc (NYSE:ETN) stands against other stocks in Jim Cramer’s latest portfolio heading into 2025.
Jim Cramer in a latest program reiterated his view that the market is currently oversold and told investors about his methodology of analyzing market selling and buying indicators based on an oscillator.
“Once it touches minus 5, you need to hold your nose and start buying, no matter how bad it looks. Minus 5 means we’re oversold and due for a bullish bounce. When the oscillator goes below minus 8, as it did last night, the only thing you can do is buy hand over fist. Under no circumstances should you sell with the oscillator below minus 8 because, at that point, the selling ship has sailed. The odds are against you if you sell into an extremely oversold market.”
Cramer then mentioned a few historical data points explaining the returns one could get if one invests when the market is in the oversold territory.
“If you bought the S&P 500 Index when the oscillator hit minus 8, you would have averaged a 2.88% gain within the next 30 days. That’s over a 10-year period, with the median up 4.7%. It gets even better 60 days out— the average gain was 8.93%, and the median was over 9%. Those are some huge moves. How about the odds? Thirty days after the oscillator hits minus 8, as it did last night, the market was up 70% of the time. Sixty days after, the market was up 80% of the time. That’s an extraordinarily reliable pattern, people. Nothing in the market is a sure thing, of course, but the frequency of those gains means the odds are heavily in your favor if you buy in an oversold market this time.”
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In
For this article, we watched several latest programs of Jim Cramer and picked 10 stocks he is talking about. With each company, we have mentioned its latest 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).
Eaton Corporation plc (NYSE:ETN)
Number of Hedge Fund Investors: 90
Jim Cramer was asked for his thoughts about Eaton Corporation plc (NYSE:ETN) and the stock’s decline over the past few days. Cramer recommended the investor hold the stock and not sell it.
“Eaton Corporation plc (NYSE:ETN) is a Buy and Hold story. They’ve really done incredible work to be able to revolutionize that portfolio. They are pure winners at Eaton. Do not sell. Own.”
The Electrical Americas sement remains the standout performer for Eaton Corporation plc (NYSE:ETN) driven by strong demand from data centers, utilities, and manufacturers. This demand is expected to continue, with the segment maintaining a book-to-bill ratio of 1.2 and a 26% increase in backlog year-over-year. Growth in the Electrical Global segment is more subdued, though still positive, as many countries lag behind the US in key secular trends. However, this segment is facing greater challenges in expanding margins compared to its domestic counterpart. The Aerospace segment is also performing well, posting growth in sales, margins, and order backlog, despite operational disruptions from Hurricane Helene and the Boeing (BA) strike in Q3. The key challenges for the company lie in its two automotive segments, Vehicle and eMobility. Demand for electric vehicles has slowed significantly, and commercial vehicle demand in the internal combustion engine (ICE) market is also declining.
For 2025, all of Eaton Corporation plc (NYSE:ETN) segments, except for commercial vehicles, are projected to grow, with the commercial vehicle segment representing just 7% of Eaton’s sales. Data centers, commercial aerospace, and electric vehicles are expected to see strong double-digit growth, collectively accounting for 29% of Eaton Corporation plc (NYSE:ETN) sales.
Ave Maria World Equity Fund stated the following regarding Eaton Corporation plc (NYSE:ETN) in its first quarter 2024 investor letter:
“Eaton Corporation plc (NYSE:ETN) is an intelligent power management company. The company is a long-term beneficiary in the trend towards electrification, energy transition and digitalization. Eaton is also benefiting from unprecedented global stimuli such as the Inflation Reduction Act, Infrastructure Investment and Jobs Act, the Chips and Science Act and the EU recovery plan known as the NextGenerationEU.”
Overall, ETN ranks 1st on our list of Jim Cramer’s latest portfolio heading into 2025. While we acknowledge the potential of ETN, our conviction lies in the belief that under the radar 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 ETN 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.
