Jim Cramer in a latest program yet again lamented over the market’s obsession about the Fed’s stance over sticky inflation, saying the latest Fed minutes from April 30 to May 1 spooked investors because the central bank officials seem to be getting “impatient” with the inflation’s slower-than-expected decline.
However, Cramer said that economic data released after these Fed minutes showed that the labor market as well as inflation are cooling, exactly what the Fed wants. Cramer said had the Fed officials seen this data before, their minutes would have been different.
Cramer to Fed: Your “Inflation Lamentation” Is Not Needed
Cramer said that the Fed needs to know that their “inflation lamentation” from three weeks ago isn’t necessary.
Jim Cramer said that consumer spending has been the biggest issue for the Federal Reserve as they wonder, “is they any place that’s too high for them (consumers).” Cramer acknowledged that without putting brakes on consumer spending it’d be impossible to beat inflation.
Cramer Thinks Fed is Winning Battle Against Inflation Amid “Nascent Signs” of Success
However, the CNBC host said that if Fed officials had paid attention they’d have found that they are “finally” winning their battle against consumer spending too.
Jim Cramer said there are “nascent signs” showing that the consumers are finally saying “enough is enough.” Cramer pointed to Walmart’s latest numbers as a sign of consumers’ preference for discount retailers. Cramer said Walmart is one of the few companies offering value in budget.
“The Consumer Has Had Enough”
“After years of seemingly endless price increases, the consumer has had enough. Consumers are now staying more at home.”
Jim Cramer also highlighted latest comments from Kevin Hourican, the CEO of Sysco, which supplies food products to restaurants. Hourican said that the industry needs to do “something” about the rising prices that are affecting foot traffic at restaurants.
Cramer Sees a “Consumer Rebellion”
Jim Cramer thinks a “consumer rebellion” is happening in the industry which has executives scratching their heads.
Another sign of this rebellion, according to Cramer, is major companies like McDonald’s Corp (NYSE:MCD) rolling out budget options. Cramer said that consumers also has had enough of price increases at McDonald’s Corp (NYSE:MCD), and the company needed these budget menu offerings to increase traffic.
Methodology
While Cramer continues to remain bullish on the overall economy and major tech stocks like NVIDIA Corp (NASDAQ:NVDA), Amazon.com Inc (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOG), he’s bearish on some stocks. For this article we watched several latest programs of Cramer and picked seven stocks he’s recommending investors to stay away from.
7. Canada Goose Holdings Inc (NYSE:GOOS)
Number of Hedge Fund Investors: 10
Extreme weather outwear company Canada Goose Holdings Inc (NYSE:GOOS) is one of the stocks Jim Cramer is bearish on these days. In a latest program on CNBC, when asked about the Toronto-based company, Cramer recommended investors to stay away from the stock, citing its numbers and stock performance.
“When I see a company report that kind of number that good and it doesn’t go up, I say, ain’t nothing going to get this thing going. Let’s stay away.”
Canada Goose Holdings Inc (NYSE:GOOS) recently posted better-than-expected Q4 results, which Canada Goose Holdings Inc (NYSE:GOOS) CEO Dani Reiss attributed to margin expansion, strong comp sales and increasing global footprint.
Over the past one year, Canada Goose Holdings Inc (NYSE:GOOS) shares have lost about 17% in value.
Insider Monkey’s database of 919 hedge funds shows that just 10 hedge funds reported owning stakes in Canada Goose Holdings Inc (NYSE:GOOS) as of the end of the first quarter of 2024. The most notable stake in Canada Goose Holdings Inc (NYSE:GOOS) is owned by Samantha Mclemore ‘s Patient Capital Management, worth about $50 million.
Meridian Growth Fund stated the following regarding Canada Goose Holdings Inc. (NYSE:GOOS) in its fourth quarter 2023 investor letter:
“Canada Goose Holdings Inc. (NYSE:GOOS) is a global lifestyle brand and manufacturer of performance luxury apparel. The firm, widely known for its iconic down parkas, has expanded its product offerings in recent years and has embarked on a strategic shift from a wholesaling model toward a vertically integrated direct-to-consumer model. The stock fell during the quarter as the company continued to underperform its luxury peer’s post-pandemic. The company’s significant investments in brick-and-mortar stores also underperformed, particularly in China, where the slow-to-materialize consumer recovery has weighed on results. While there are signs that the strategic transition may pay off, our concerns around weaker topline performance, generally elevated inventories, management turnover, and overall execution led us to exit the position during the quarter.”
6. GigaCloud Technology Inc (NASDAQ:GCT)
Number of Hedge Fund Investors: 13
Jim Cramer recently talked in detail about B2B marketplace services company GigaCloud Technology Inc (NASDAQ:GCT). Cramer said GigaCloud Technology Inc’s (NASDAQ:GCT) business model of connecting manufacturers in Asia with resellers in the rest of the world is a “cool idea.” Cramer highlighted that GigaCloud Technology Inc (NASDAQ:GCT) became a “meme stock in the past, rising from $12 to $62, thanks to the “memesters,” before “collapsing. Cramer said that GigaCloud Technology Inc (NASDAQ:GCT) became the target of a short-seller report published by Culper Research, in which some of GigaCloud Technology Inc’s (NASDAQ:GCT) business practices were called into question. Cramer thinks GigaCloud Technology Inc (NASDAQ:GCT) didn’t clarify all of the allegations.
While Cramer praised GigaCloud Technology Inc’s (NASDAQ:GCT) numbers and expansion, he’s put off by the stock’s volatility and lack of GigaCloud Technology Inc’s (NASDAQ:GCT) response to allegations.
“Somebody out there knows something that I and we don’t.”
Cramer said in the presence of several quality ecommerce and logistics stocks, it wouldn’t make sense to “chase this one after a massive run.”
5. Excelerate Energy Inc (NYSE:EE)
Number of Hedge Fund Investors: 15
Jim Cramer was recently asked about LNG solutions company Excelerate Energy Inc (NYSE:EE). Cramer said he’s not a “big fan” of this stock and instead recommended Corterra Energy. However, last month, Cramer had made positive comments about the stock, saying Excelerate Energy Inc (NYSE:EE) would “fly” if the US government reverses its decision to halt LNG projects expansion, which, according to Cramer, is one of the “dumber” things the current administration has done.
Over the past one year, Excelerate Energy Inc (NYSE:EE) shares have lost about 10% in value.
As of the end of the first quarter of 2024, 15 hedge funds tracked by Insider Monkey had stakes in Excelerate Energy Inc (NYSE:EE).
Earlier this month, Excelerate Energy posted first quarter results. Adjusted EPS in the quarter came in at $0.24, beating estimates by $0.14. Revenue in the quarter fell 5.2% year over year to $200.1 million, surpassing estimates by $171.12 million.
4. Corning Inc (NYSE:GLW)
Number of Hedge Fund Investors: 31
Jim Cramer is extremely disappointed with specialty glass and ceramics company Corning Inc (NYSE:GLW). In a program earlier this month, Cramer said that “this company has failed” and has not been able to generate the “kind of return I wanted.”
Cramer said that he’d not be a buyer of this stock “all the way up here.”
“I just can’t come up with a thesis.”
Corning Inc (NYSE:GLW) saw a decline in hedge fund sentiment in the first quarter of 2024, as 32 funds reported owning stakes in Corning Inc (NYSE:GLW) in the period, down from 39 hedge funds in the previous quarter.
Over the past five years, Corning Inc (NYSE:GLW) shares have gained about 23%.
Earlier this month, Mizuho Securities analysts led by John Roberts started covering the stock with a Neutral rating and a $36 price target.
The analyst said he could turn positive on the stock if Corning Inc (NYSE:GLW) could offset FX headwinds by increasing display glass prices without losing market share.
3. Kraft Heinz Co (NASDAQ:KHC)
Number of Hedge Fund Investors: 43
Illinois-based food company Kraft Heinz Co (NASDAQ:KHC) is one of the stocks Jim Cramer is bearish on these days. When asked about the stock in a latest program, Cramer said that Kraft Heinz Co (NASDAQ:KHC) is one of the “storied” brands and this kind of brands don’t make a lot of money because they are not considered “fresh” by Wall Street. Cramer said a lot of products developed by Kraft Heinz Co (NASDAQ:KHC) are not that “important” which is why he hasn’t recommended the stock “in ages.”
Piper Sandler disagrees with Jim Cramer. Earlier this month the firm upgraded Kraft Heinz Co (NASDAQ:KHC) to Overweight from Neutral. Piper Sandler said Kraft’s food services business now has better visibility amid innovation in time-saving and labor-saving dispensers. Piper Sandler analyst Michael Lavery said Kraft Heinz Co’s (NASDAQ:KHC) food services business growth could accelerate by 2025. The analyst also likes the stock’s valuation and thinks Kraft Heinz Co’s (NASDAQ:KHC) FCF can offset downside risks.
Insider Monkey’s database of 919 hedge funds shows that 43 hedge funds reported owning stakes in Kraft Heinz Co (NASDAQ:KHC) as of the end of the first quarter of 2024. The biggest stakeholder of Kraft Heinz Co (NASDAQ:KHC) is Warren Buffett’s Berkshire Hathaway which has a $12 billion stake in Kraft Heinz Co (NASDAQ:KHC).
2. Under Armour Inc Class A (NYSE:UAA)
Number of Hedge Fund Investors: 33
Jim Cramer recently said in a program that he’s a “huge supporter” of Kevin Plank, Under Armour Inc Class A’s (NYSE:UAA) founder and CEO. However, he said he’s not a supporter of the stock. That’s because, according to Cramer, the competition in the athletic apparel industry is very high. Cramer said he’s sure if Kevin Plank goes to another industry he’d be “crushing it” but in this industry you have to compete with major players like Nike and New Balance.
“These are just serious competitors and you’ve got to be on your game every second.”
Wall Street analysts are also questioning Under Armour Inc Class A’s (NYSE:UAA) future following downbeat fiscal Q4 results. J.P. Morgan analyst Matthew recently said that increasing competition in the industry and Under Armour Inc Class A’s (NYSE:UAA) 18-month reset plan would leave it lagging behind peers, as he downgraded the stock to $6
“While we see secular health/wellness and casualization tailwinds providing Sportswear sector insulation, we see Under Armour lagging peers in terms of innovation, profitability, and DTC infrastructure,” the analyst said.
Under Armour Inc Class A (NYSE:UAA) shares are down about 20% so far this year.
Of the 919 hedge funds tracked by Insider Monkey, 33 funds reported owning stakes in Under Armour Inc Class A (NYSE:UAA). The biggest stake in Under Armour Inc Class A (NYSE:UAA) is owned by Anand Parekh’s Alyeska Investment Group which owns a $44 million stake in Under Armour Inc Class A (NYSE:UAA).
1. Nutanix Inc (NASDAQ:NTNX)
Number of Hedge Fund Investors: 56
California-based Nutanix Inc (NASDAQ:NTNX) sells software for data centers and Cloud platforms. The stock has gained a massive 56% so far this year, and this performance is precisely why Cramer is staying away from the stock for now. In a latest program on CNBC, Cramer said that Nutanix Inc (NASDAQ:NTNX) is what the market “”wants right now” because it’s an enterprise software and Cloud platforms company.
“People can’t get enough of it,” Cramer said.
However, Cramer said that he has “too much discipline” to recommend the stock at “this level.”
Cramer might not be recommending Nutanix Inc (NASDAQ:NTNX) right now, but smart money investors are piling into Nutanix Inc (NASDAQ:NTNX) to ride the AI-powered boom in the software space. As of the end of the first quarter of 2024, 56 hedge funds tracked by Insider Monkey reported owning stakes in Nutanix Inc (NASDAQ:NTNX). The most significant stake in Nutanix Inc (NASDAQ:NTNX) is owned by David Blood and Al Gore’ sGeneration Investment Management, worth about $780 million.
Earlier this month, Raymond James upgraded the stock to Outperform from Market Perform and increased its price target to $72 price target on the stock.
Nutanix Inc (NASDAQ:NTNX) recently announced that it has partnered with NVIDIA, after which NVIDIA NIM inference micro-services will be integrated with Nutanix Inc (NASDAQ:NTNX) GPT-in-a-Box 2.0. This integration would help customers develop secure and scalable generative AI applications.
Carillon Chartwell Small Cap Value Fund made the following comment about Nutanix, Inc. (NASDAQ:NTNX) in its Q3 2023 investor letter:
“Within the Carillon Chartwell Small Cap Growth Fund, information technology and industrials were the strongest-performing sectors, with strong stock selection leading to alpha generation. The new management team at Nutanix, Inc. (NASDAQ:NTNX) continues to execute well, delivering another positive quarterly earnings surprise. Nutanix’s core hyperconverged infrastructure (HCI) technology continues to gain market share over its competitors.”
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