Jim Cramer, host of Mad Money, recently offered some important advice on how young people should approach investing and managing their money. He emphasized that the first and most important step for anyone is to invest. Cramer pointed out that investing is the only way to secure financial freedom in the long term. He then stated:
“Before you can start investing, you need to pay off the foreign credit card… No matter how much money you rack up in the stock market, if you’re carrying a balance on your credit cards, then it’s going to eat your returns.”
READ ALSO 10 Stocks on Jim Cramer’s Radar and 17 Best Stocks for Kids According to Jim Cramer
Cramer then shared a few lessons specifically tailored for young investors. He explained that the first piece of advice is valuable to people of all ages. His advice was that young people should save money. He noted that the stock market can actually serve as a tool to help people save by forcing them to set aside a portion of their paycheck that they might otherwise spend. He then added:
“Second lesson for young investors, this is a much more targeted piece of advice: While you’re still young, you can afford to take a lot more risks than say a gray beard like myself.”
Finally, Cramer stressed that it is never too early to begin planning for retirement. He recommended taking full advantage of any employer-sponsored 401(k) plan, especially if the employer matches contributions. He also urged young investors to consider contributing to a Roth IRA, which he described as an ideal option for those early in their careers.
“Here’s the bottom line: For young people just outta college investing is a great way to trick yourself into saving money you might otherwise spend. Beyond that, remember, when you’re young, you can afford to take a lot more risk with your portfolio and it’s never too soon to start contributing to your 401k or IRA.”
Jim Cramer Shed Light on These 10 Stocks
Our Methodology
For this article, we compiled a list of 10 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on January 24. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
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).
Jim Cramer Shed Light on These 10 Stocks
10. The Wendy’s Company (NASDAQ:WEN)
Number of Hedge Fund Holders: 21
Cramer expressed worry about The Wendy’s Company (NASDAQ:WEN) and was doubtful about the company when compared to its peers.
“I’m worried about Wendy’s. That should not have a 7% yield. That to me says something may be wrong here. McDonald’s is kicking butt. I, I saw an upgrade today for Burger King… Alright, I’ve gotta take a quick survey and I gotta tell you, you know what, Wendy’s, no. They have not demonstrated that they can pull it off in a very competitive world.”
Wendy’s (NASDAQ:WEN) operates and franchises quick-service restaurants specializing in hamburgers, while also developing real estate and managing property leases. It focuses on both restaurant operations and franchising. On CNBC’s Cramer’s Stop Trading that was aired in February 2024, Cramer said:
“People don’t like these Wendy’s numbers and one of the things that’s really interesting is that is that they just got Kirk Tanner he’s come in from PepsiCo and I think he’s terrific but you do have a 5% yield which is raising eyebrows. Some people think that can’t be sustained remember… So, Wendy’s, you can either see it’s a great opportunity or you can be like my wife and just go eat the Baconator and move on.”
9. TETRA Technologies, Inc. (NYSE:TTI)
Number of Hedge Fund Holders: 24
While Cramer acknowledged TETRA Technologies, Inc.’s (NYSE:TTI) return, he also noted the stock’s high price-to-earnings multiple.
“It’s a very good company. It did come up from the ashes. As a matter of fact, it’s come up so much, it’s up 28% for the year. So I cannot sanction by it given the fact that it has [an] incredibly high price to earnings multiple.”
TETRA Technologies (NYSE:TTI) provides energy services and solutions, including the manufacturing and marketing of completion fluids, additives, and water management services for the oil and gas industry. The company also offers products for well drilling, completion, and workover operations, along with services like frac flowback and production well testing.
Year-to-date, TETRA Technologies (NYSE:TTI) stock is up over 18%.
8. Casella Waste Systems, Inc. (NASDAQ:CWST)
Number of Hedge Fund Holders: 28
Talking about Casella Waste Systems, Inc. (NASDAQ:CWST) during the episode of Mad Money, Cramer said:
“You know this one has been around forever and it just caught fire. I think it’s good but you know what? I am gonna go back to WM. I think WM is terrific and it just had a dip and it’s a little bit cheaper. That’s the one you should go and we gotta speak to Jim Fish. That’s the one you wanna be at.”
Casella Waste Systems (NASDAQ:CWST) provides integrated solid waste management services, including waste collection, recycling, disposal, and transfer operations, catering to various residential, commercial, and industrial customers. The company also markets recyclable materials such as cardboard, plastics, and metals.
Cramer’s preferred stock of WM is up over 20% over the last year, while Casella Waste Systems (NASDAQ:CWST) stock also gained over 20%.
7. The Hershey Company (NYSE:HSY)
Number of Hedge Fund Holders: 33
A caller expressed worry about The Hershey Company (NYSE:HSY) in light of price increases for cocoa. In reply, Cramer commented:
“52-week low, 52-week low today, 3.6% yield. That doesn’t protect against anything because you know you can get a lot more… interest rates. The stock is, the numbers can’t be made. Still sells at 16 times earnings. Wake me up when it sells at 14 times earnings and then I might even consider it. If you have to own sweets, go own Mondelez, okay? Just own Mondelez.”
The Hershey Company (NYSE:HSY) manufactures and sells a wide variety of confectionery products, snacks, and pantry items, offering popular brands like Hershey’s, Reese’s, Kisses, and Kit Kat, among others. Its product range includes chocolate, gum, protein bars, baking ingredients, and savory snacks. While Cramer did not lean toward the company during the episode, his sentiments were different toward the company in 2022 when he said:
“Hershey’s the most consistent growth stock in a group where safety’s first, and you know what they say, safety never takes a vacation. I would buy some here, then wait to buy more if the stock gets hit the next time we have an inflation scare… One of the best kept secrets of this market is how well this company, this simple confectionary maker, has done in the era of inflation. Put simply, Hershey is the best performer in the group by any measure, but it’s never talked about.”
6. Rockwell Automation, Inc. (NYSE:ROK)
Number of Hedge Fund Holders: 38
Cramer expressed disappointment with Rockwell Automation, Inc. (NYSE:ROK) and recommended taking advantage of Tesla once it goes down after reporting its earnings.
“Okay, to be fair… I have been disappointed in how much they’re really doing in robotics. They’ve done something, they’re gonna tell you, they do have a lot of robotics but I’m gonna just put it out there, I know you’re not gonna buy this but the one, if you wanna buy robotics, here’s what you do, you buy the stock of Tesla. You can wait till they report. The stock usually goes down when they report, they report this week. Get an opportunity to buy it the next day. Take advantage of it.”
Rockwell Automation (NYSE:ROK) provides industrial automation and digital transformation solutions, offering a range of hardware, software, and services, including control, safety, motion, and sensing products, along with consulting and maintenance services. Over the past year, the company stock gained a modest 7.25% while Tesla’s stock was up more than 83%.
5. Jefferies Financial Group Inc. (NYSE:JEF)
Number of Hedge Fund Holders: 43
Discussing Jefferies Financial Group Inc. (NYSE:JEF) during the episode, Cramer said:
“Let me just tell you this, I think that Jefferies had a surprisingly bad quarter. I think Goldman Sachs had a surprisingly good quarter. So here’s what we do, even as I just think the world of the CEO of Jefferies, I want you to sell Jefferies and I want you to buy Goldman. Goldman’s cheaper. Goldman’s better.”
Jefferies (NYSE:JEF) is an investment banking and capital markets firm that provides a broad range of services and oversees various alternative asset management platforms with different investment strategies and asset classes. Before the company reported its earnings in January, Cramer remarked:
“It’s called Jefferies Financial Group. This stock’s been a total winner. Get this, it ran from $39 and change this time last year to $81 today. That is stellar.
I think the change at the FTC where the chief who’s ideologically opposed to big business is about to be replaced by someone with a more traditional approach will mean many, many, many, many, many more takeovers and that means very big earnings per share for Jefferies, which consults on these deals, I wanna hear about their outlook for 2025.”
4. Target Corporation (NYSE:TGT)
Number of Hedge Fund Holders: 49
Cramer highlighted the lack of pizazz in Target Corporation (NYSE:TGT) and noted that its peers are overshadowing it currently.
“You know what, I actually think that there’s gonna be like an activist at Target eventually because it does have a good balance sheet and it’s very cheap. But here’s the problem: They do food and food is something you need scale on and Costco and Walmart do much better food. They do delivery and that’s something you need scale on and Walmart and Amazon do a much better job. They need more pizazz and that is something that Brian Cornell can control and they haven’t had it lately. You don’t hear like, I gotta go to Target, I gotta go to Target. They need to bring the excitement back and it doesn’t have it right now.”
Target (NYSE:TGT) is a general merchandise retailer offering a wide range of products, including apparel, beauty items, groceries, electronics, home goods, and seasonal merchandise. The company also provides personal care, baby items, pet supplies, and various household essentials.
For context, over the past 12 months, Target’s (NYSE:TGT) stock declined over 14% while Amazon’s stock gained more than 33%, Costco’s stock went up over 47% and Walmart’s stock rose more than 82%.
3. Nu Holdings Ltd. (NYSE:NU)
Number of Hedge Fund Holders: 54
When a caller asked Cramer about Nu Holdings Ltd. (NYSE:NU), he suggested SoFi instead.
“You know this is a finTech company and it’s a really hard company… It’s very expensive. I actually would prefer I, I prefer SoFi, which reports on Monday morning.”
Nu Holdings (NYSE:NU) offers a range of digital banking services, including credit and prepaid cards, mobile payment solutions, savings and investment products, personal loans, and various insurance options, all through its digital platform. The company stock was up over 38% while SoFi stock rose more than 77% over the past 12 months.
White Falcon Capital Management stated the following regarding Nu Holdings Ltd. (NYSE:NU) in its Q4 2024 investor letter:
“Nu Holdings Ltd. (NYSE:NU) has recently corrected due to Brazil’s macroeconomic struggles. Nu reports its earnings in U.S. dollars but generates revenue in Brazilian reais, Mexican pesos, and Colombian pesos. The sharp depreciation of these emerging market currencies, coupled with ongoing macroeconomic uncertainty, is making investors uncomfortable. Our due diligence suggests that Nu remains unaffected. Importantly, we continue to believe that Nu is a rare business with a combination of a large market opportunity, a strong moat driven by its superior cost structure, and a brilliant management team.”
2. Abbott Laboratories (NYSE:ABT)
Number of Hedge Fund Holders: 63
Abbott Laboratories (NYSE:ABT) was mentioned during the episode. Here’s what Mad Money’s host had to say:
“Yeah, Abbott was, was along with Intuitive Surgical, one of the stars of the… JPMorgan Healthcare conference last week. I’m glad I went out there… I went and really kicked the tires on Abbott and we loved what we saw. Robert Ford is doing a remarkable job and the stock is up in a straight line at $125. I can’t recommend anything on a straight line. But if it pulls back a couple of bucks, though, it’s good because this should be one of the great pharma stories because it’s got the best growth in device and pharmaceuticals. I think it’s great. And the market finally seemed to realize what Robert Ford and I believe, Abbott is a great company. Big position for the trust.”
Abbott Laboratories (NYSE:ABT) is a healthcare firm focused on the research, development, manufacturing, and marketing of a wide variety of healthcare products.
1. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 235
Meta Platforms, Inc. (NASDAQ:META) creates products that facilitate worldwide connectivity, offering platforms such as Facebook, Instagram, Messenger, and WhatsApp, along with augmented and virtual reality technologies, software, and content. When a caller mentioned Meta Platforms, Inc. (NASDAQ:META), Cramer said, “I like Meta ahead of the quarter.”
Recently, when Cramer was advising parents on which stocks to pick for their kids, he said:
“At the same time, you also want to give your kids something with a little more juice like the great growth stocks of an era. I mean, I’m talking about the, the Apples, the, the NVIDIAs, the Teslas, the Metas…My kids were on Facebook earlier. My youngest got sick of Facebook early on probably because I got on it. But then she went on to Instagram, which Facebook cleverly acquired and then kept as something separate. So you really didn’t know it was part of something that older people had discovered.
I didn’t think the ads worked until we were inundated with Red Hot Chili Pepper merchandise bought on a click for something that, as my daughter said, wasn’t an ad, just a link… But it seems that only Mark Zuckerberg has the forethought to care about the user experience to such an extent that it works. Because the ads actually make sense, you do wanna click on them.”
While we acknowledge the potential of Meta Platforms, Inc. (NASDAQ:META) as an investment, 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 META 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 was originally published at Insider Monkey.
