In this article, we will take a detailed look at Jim Cramer Stocks: 10 Latest Calls.
Jim Cramer in a new program on CNBC talked about the latest pullback on Tuesday, when the market snapped its 8-day winning streak. Cramer said that the hopes of rate cuts were buoying the markets all along. According to Cramer, when a company posted a good quarter, its stock roared. If a company reported a bad quarter, investors assumed it was the “last bad quarter” because the Fed was about to start cutting rates.
“In other words, companies could do no wrong. But not today. Today we had a bit of a reckoning and dose of reality being thrown in our faces.”
Cramer talked about two home improvement companies that recently reported their quarters. According to Cramer, these results show that the consumer is still extremely cautious, and high mortgage rates and inflation is keeping spending on big-ticket items depressed.
“Wall Street is maybe expecting not good news from the Fed on Friday and therefore a slowdown, a bad slowdown,” Cramer said.
Jim Cramer said the market is “rational” again and the optimism needed to be “tempered” before the next rally.
For this article we watched several latest programs of Jim Cramer aired on CNBC and picked 10 stocks he’s recommending investors to buy or sell. With each company, we have mentioned the number of hedge fund investors. 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).
10. Salesforce Inc (NYSE:CRM)
Number of Hedge Fund Investors: 120
Jim Cramer in a latest tweet shared that Salesforce is a part of his charitable trust’s portfolio. Cramer was commenting on CRM CEO Marc Benioff’s tweet in which he said that Salesforce’s AI-driven customer support platform Agentforce, code-named Atlas, resolves 90%+ of all customer inquiries for the company’s top healthcare, financial services, payments, travel & entertainment clients.
“I like this.. Salesforce owned by charitable trust,” Cramer said.
BofA Securities believes Salesforce Inc (NYSE:CRM) is one of the best beaten-down tech stocks presenting an attractive entry point following the latest selloff.
According to Yahoo Finance data, Salesforce Inc (NYSE:CRM) is expected to see earnings growth of about 16% on a per-annum basis over the next five years. Data also shows the company is expected to deliver double-digit YoY EPS growth in the next ten out of eleven quarters.
While Salesforce Inc (NYSE:CRM) is primarily a customer relationship software company, with notable tools and platforms like Sales Cloud, Service Cloud, Marketing Cloud, Tableau, MuleSoft, and Slack, its most promising platform is Data Cloud when it comes to AI and software. The platform has 90% year-over-year growth and clocking in $400 million in FY2024. What does this platform do? It helps organizations process data from various departments and third-party cloud solutions. Powered by an AI-driven data engine, it analyzes metadata in real time to provide valuable insights, supporting sales, marketing, and customer service workflows.
As of the end of Q1 Salesforce Inc (NYSE:CRM) had $17.7 billion in cash and low financial leverage.
Mizuho Securities analyst Gregg Moskowitz thinks the company is still “well situated” to help customers in digital transformation. However, the analyst thinks Salesforce Inc. (NYSE:CRM) would do so by prioritizing profitable growth. The analyst reiterated his Buy rating on the stock but cut his price target to $300 from $345.
Morgan Stanley analyst Keith Weiss, who has an Overweight rating and a $320 price target on Salesforce Inc. (NYSE:CRM), said that Salesforce’s PEG ratio of 1.2 shows the market is not pricing in operational discipline and earnings growth sustainability.
9. Southwest Airlines Co (NYSE:LUV)
Number of Hedge Fund Investors: 23
Jim Cramer said in a latest program that Paul Singer’s Elliott Management’s nominees for Southwest board are exactly what the company needs to improve its performance.
“On the other hand, if left to its own devices, I bet Southwest will keep going lower. There’s still time for the board to accept their lack of diligence and move on with their heads high, but I am definitely betting on Elliott here since his people are better and they will get a better CEO,” Cramer said.
Southwest Airlines Co (NYSE:LUV) is trending after billionaire Paul Singer’s Elliott Management opened a $2 billion stake in the company and demanded 10 board seats. The hedge fund believes the stock has the potential to reach $49. But Elliott’s battle would be long and hard as Southwest Airlines Co (NYSE:LUV) faces both external and internal issues.
Southwest Airlines Co (NYSE:LUV) management acknowledges the need for change but believes the company’s strong balance sheet positions it well to weather these challenges. The airline has been adapting to shifts in the market, including offering more medium and long-haul flights and maintaining its efficiency edge over competitors, despite facing similar operational costs. Southwest’s strong employee relationships and ongoing adjustments to its business model reflect its commitment to maintaining profitability.
As Southwest Airlines Co (NYSE:LUV) looks to the future, it’s expected to target growth in its home market of North Texas. With legal restrictions set to lift next year, Southwest may expand operations to other regional airports, possibly even Dallas/Fort Worth International Airport (DFW), where it has long faced competition from American Airlines. Despite the hurdles, Southwest Airlines Co (NYSE:LUV) is poised to adapt and grow in the evolving airline landscape.
8. Etsy Inc (NASDAQ:ETSY)
Number of Hedge Fund Investors: 36
Jim Cramer was asked about Etsy in a latest program by a caller who said he’s down 30% on his position in the company. Here is what Cramer said:
“I think you are going to understand that if you are willing to buy time for a while that’s what you are going to have to do with Etsy because it’s not going to go right back up, it’s just not,” Cramer said.
Etsy Inc (NASDAQ:ETSY) is an online marketplace for handmade or vintage items, art and collectibles. The platform saw strong activity during the pandemic days but since then the company has been trying to spur growth and facing headwinds amid inflation and an overall weakening consumer environment.
During the second quarter, Etsy Inc (NASDAQ:ETSY) gross merchandise sales fell 1.9% year over year on a constant currency basis. Earlier in the year the company had hinted that its GMS metric would recover later in the year but there was no mention of that expected improvement in the latest earnings call. During the third quarter the company expects GMS to decline in the low single digits. Etsy Inc (NASDAQ:ETSY) reaffirmed its full-year adjusted EBITDA margin target of at least flat to FY23, or 27%.
During the second quarter, Etsy saw solid response to its new gifting feature but that was mainly due to events like Mother’s and Father’s Day and graduations. Etsy Inc (NASDAQ:ETSY) is also betting on another new feature called Etsy Insider — a subscription program that offers benefits like free shipping, some special discounts, etc. However, analysts believe these won’t be enough for the company to return to the past growth.
Artisan Small Cap Fund stated the following regarding Etsy, Inc. (NASDAQ:ETSY) in its Q2 2024 investor letter:
“We ended our investment campaigns in Bentley and Etsy, Inc. (NASDAQ:ETSY) during the quarter. Etsy is the leading e-commerce marketplace for buyers and sellers of unique, hard-to-find handmade or vintage products. Given its large addressable market, experienced management team and unique technology investments, we believed the company had a long runway for further top-line growth. However, financial results have been disappointing, and we decided to exit the position.”
7. Arm Holdings PLC – ADR (NASDAQ:ARM)
Number of Hedge Fund Investors: 38
Jim Cramer talked about ARM in a program on CNBC a few days ago and praised the company’s leadership.
“By the way Arm I think is a pretty good company. Rene Haas (ARM CEO) is doing a pretty good job there.”
Arm Holdings PLC – ADR (NASDAQ:ARM) shares fell after the company posted fiscal first-quarter results and gave guidance that failed to impress Wall Street. Analysts believe extremely high expectations are affecting the stock as the market continues to expect rapid growth at once. Arm Holdings PLC – ADR (NASDAQ:ARM) revised its guidance for the full year which still points to about 27% year-over-year revenue growth.
Revenue growth at ARM is expected at around 22% over the next few years.
Why is Arm Holdings PLC – ADR (NASDAQ:ARM) a promising stock? The company makes advanced microprocessors that are key to most electronic devices, known for their power efficiency and high performance. These processors are used in everything from smartphones and laptops to automotive systems and cloud data centers. The company generated revenue by licensing its designs to manufacturers and earning royalties from products that use its technology. . Demand for its technology is rising, particularly in AI, smartphones, and cloud computing. New product launches and partnerships with companies like Google and AWS further bolster its market position. Arm Holdings PLC – ADR (NASDAQ:ARM) anticipates continued growth in licensing and royalty revenues, fueled by the adoption of its v9 architecture.
Despite this, the stock’s forward P/E of 80 is too high a price to pay right now when competition is increasing and investors’ patience on AI monetization is running thin.
6. Nucor Corp (NYSE:NUE)
Number of Hedge Fund Investors: 40
A disappointed caller recently asked Jim Cramer whether he should sell Nucor because of its losses.
“Oh no don’t sell Nucor. In the end Nucor is a cyclical company. Sometimes we want these big steel companies to be something other than they can be,” Cramer said.
“When the Fed starts cutting interest rates the first stop people are going to reach for, including me for my charitable trust, will be Nucor. So please do not sell the stock,” Cramer added.
Morgan Stanley upgraded Nucor Corp (NYSE:NUE) to “Overweight” from “Equal Weight” with a $176 price target. The bank highlighted that despite strong earnings growth and cash generation expected in 2025 and 2026, the stock has underperformed its peers.
Analyst Carlos de Alba noted that Nucor currently trades at a discount to Steel Dynamics (STLD) on an EV/EBITDA basis for 2025, while its P/E premium is below its five-year average. De Alba believes this discount is unjustified given Nucor’s higher expected earnings growth.
De Alba also favors Nucor Corp (NYSE:NUE) over Cleveland-Cliffs (CLF), citing expected subdued auto production in the second half of 2024, which he thinks will limit upside for flat steel prices and constrain Cliffs’ earnings recovery.
5. Boeing Co (NYSE:BA)
Number of Hedge Fund Investors: 42
Talking about Boeing in a latest program, Jim Cramer said that the company has taken “advantage” of its market dominance.
“If there were five aircraft makers in this world then I would think Boeing would have been done for and out. But there are only two. Two companies that make large commercial aircraft, which means these guys can afford to make endless mistakes and they have taken advantage of that,” Cramer said.
Cramer expressed faith in Boeing’s new CEO Kelly Ortberg and said that the new executive might be able to save the company. However, Cramer said the company’s balance sheet is “hideous” and it’s not the time to buy the stock.
Cramer has been bullish on Boeing Co (NYSE:BA) despite the disastrous effects of several incidents involving Boeing planes including the Boeing 737 MAX-9. Boeing recently reported quarterly results and as expected the company’s losses deepened. The internet is full of the details of those horrible results. But we want to focus on why the stock could be a buy for the long term and the reasons why Jim Cramer or other Boeing bulls are still hopeful about the stock.
The biggest reason behind this optimism is the new CEO. Kelly Ortberg has a degree in Mechanical Engineering, and brings a technical background to the role, a shift from the accounting-focused leadership that investors have found concerning.
Boeing Co (NYSE:BA) is also increasing production rates, having already increased output and reactivated its third 737 MAX assembly line. The company has submitted a comprehensive plan to the FAA, aiming to surpass the current cap of 38 MAX airplanes per month. While these measures will not immediately impact earnings, they signal Boeing’s commitment to sustainable growth.
On the certification front, Boeing is progressing with solutions for the 737 MAX 7 and MAX 10, and has entered a new phase in the 777X certification campaign. These developments are seen as positive.
Boeing has made progress with the 737 MAX program. Boeing Co (NYSE:BA) has reduced traveled work, leading to cleaner fuselages and improved quality and reliability. Boeing’s submission of a comprehensive safety and quality plan to the FAA marks an important milestone. Production has increased from a low single-digit rate in the first quarter to 25 airplanes per month in June and July, though still short of the target of 38 airplanes per month by year-end. This increase suggests progress in managing manufacturing quality.
4. Chevron Corp (NYSE:CVX)
Number of Hedge Fund Investors: 64
Jim Cramer was recently asked about Chevron in a latest program. Here is what he said:
“I think that Chevron is a buy. I think that they do a great job. I think that Mike Wirth (Chevron CEO) is terrific. And I think you should pick some up, this is a nice level,” Cramer said.
He also praised the stock’s dividend yield.
With 37 years of consistent dividend increases, oil giant Chevron Corporation (NYSE:CVX) is one of the best dividend growth stocks to buy according to hedge funds. Chevron Corporation (NYSE:CVX) has been paying dividends without a break since 1984. Its annual dividend growth rate over the past three years is 5.40%. Chevron Corporation (NYSE:CVX)’s payout ratio is about 56%, which is higher than the industry mean of 45%, but given the company’s huge cash flows and strong fundamentals, dividend safety isn’t a major concern for Chevron Corporation (NYSE:CVX) investors.
Chevron Corp’s (NYSE:CVX) management has pledged fiscal discipline and caution amid massive swings in oil and commodity prices. Analysts believe Chevron Corp (NYSE:CVX) remains well-positioned in the Permian Basin and DJ Basin, with strong production numbers posted in the first quarter. In April, Chevron Corp’s (NYSE:CVX) management said it expects $80/BBL Brent in 2024 and guided for a 4% to 7% increase in total production in the year. Analysts believe this guidance was conservative as continued supply cuts from oil producers would support oil prices.
Analysts also believe now that Hess shareholders have approved Chevron Corp’s (NYSE:CVX) $53 billion acquisition of the company, the deal could go through and help Chevron expand and achieve its goals in Guyana.
Chevron Corp (NYSE:CVX) is expected to see earnings growth of 10.57% in 2025, much higher than Exxon’s 6.72% earnings growth. Given all these growth catalysts, strong fiscal position and dividends, the stock is undervalued, at a forward P/E ratio of 13.89.
3. Nike Inc (NYSE:NKE)
Number of Hedge Fund Investors: 66
Jim Cramer in a latest program grilled Nike’s management and said the company might need big changes.
“I think it’s time we have to come to terms with the idea that something may be very wrong with Nike. Otherwise, how do you explain the stock plunging from $122 to $78,” said Cramer.
Cramer said there is a similarity between Nike’s current CEO and Starbucks former CEO.
“These two management consultants have something else in common. They always have said and agree that they are doing a great job, even when the stock says the opposite.”
Nike Inc (NYSE:NKE) has indeed been a loser this year, down about 21% so far. Nike is getting battered in China amid declining sales as consumers cut back on spending due to rising inflation. Nike Inc (NYSE:NKE) also cut its fiscal first-quarter guidance as sales are likely to decline in their upcoming Q1.
However, Nike Inc (NYSE:NKE) bulls believe the company will be able to come out of this crisis following rate cuts and the easing of global economic situation. Nike remains a giant, with about $11 billion in cash, sufficient to cover its $8.9 billion long-term debt. Nike Inc (NYSE:NKE) is also the leader in the footwear market which is expected to grow at a CAGR of 6.86% from $173.89 billion in 2024 to $242.33 billion by 2029. Nike Inc (NYSE:NKE) sales in the market are about 100% higher than Adidas, the second-biggest player in the market.
Another strong reason to own Nike Inc (NYSE:NKE) shares is its dividend, which has grown for two decades now without a break.
Nike Inc (NYSE:NKE) has a forward P/E ratio of about 23, about 35% lower than its five-year average. This makes the stock undervalued for long-term investors with a large risk appetite.
ClearBridge Large Cap Growth Strategy stated the following regarding NIKE, Inc. (NYSE:NKE) in its Q2 2024 investor letter:
“Other moves during the quarter included sales of United Parcel Service (UPS) and NIKE, Inc. (NYSE:NKE). Nike has become overly reliant on key platforms, like Jordan, for revenue growth while innovation in areas like running has lagged. Nike could face continued revenue and profit pressure as it invests to re-invigorate innovation and re-position the business back toward wholesale outlets. As such, we are seeking out better ways to participate in the global consumer recovery in companies where earnings estimates have already reset.”
2. Starbucks Corp (NASDAQ:SBUX)
Number of Hedge Fund Investors: 70
Jim Cramer in a latest program said Starbucks new CEO Brian Niccol is a “genius” and he turned around Chipotle.
“If you are looking for what can be saved, you need a big change at the top. Starbucks is going to become the model,” Cramer said.
Starbucks Corp (NASDAQ:SBUX) is in the spotlight after the company poached Chipotle’s CEO Brian Niccol for its own top role. The stock rose about 20% on the news. While the new CEO cannot turn around the business overnight, what are the reasons behind this optimism?
Brian Niccol is known for success in the industry, including leading Taco Bell and Chipotle. His experience in the Quick Service and Fast Casual formats is expected to bring significant value to Starbucks Corp (NASDAQ:SBUX). Niccol also has a history of turning around the digital side of business. Chipotle’s digital orders went up from 10-15% to over 40% during his tenure, which consistently boosted revenues and earnings.
Starbucks Corp (NASDAQ:SBUX) is also adjusting its strategy, focusing on coffee innovation and drive-through formats, similar to Dutch Bros. The new textured coffee drinks are likely to be priced competitively, with Niccol’s expertise in digital marketing expected to play a key role in positioning these offerings effectively, just as he did at Chipotle,
Diamond Hill Select Strategy stated the following regarding Starbucks Corporation (NASDAQ:SBUX) in its Q2 2024 investor letter:
“Starbucks Corporation (NASDAQ:SBUX) is the global leader in the coffee industry. Given its significant scale, we believe Starbucks can maintain its average ticket growth and drive decent traffic growth, which should allow for some margin expansion. While macroeconomic and competitive pressures remain intense in China, the country accounts for a minimal percentage of today’s earnings, and we believe the current valuation embeds little to no contribution from China over the long term, which we view as too cynical. As the share price declined recently amid near-term concerns surrounding store sales in North America and China, we capitalized on what we considered an attractive entry point.”
1. AT&T Inc (NYSE:T)
Number of Hedge Fund Investors: 71
A questioner asked Jim Cramer on CNBC whether he should let AT&T go or hold it.
“Let it go. There are a lot of better opportunities including by the way T-Mobile which is really a horse,” Cramer said.
However, some analysts believe AT&T Inc (NYSE:T) has learned from the mistakes of the past and now focuses on a few areas instead of trying to expand as a conglomerate. With DirecTV and TimeWarner now out of the way via spinoffs, AT&T’s key goal is to expand its 5G business. During the recently reported quarter, AT&T Inc (NYSE:T) saw a 2% increase in postpaid phone subscribers and a similar 2% rise in average revenue per user (ARPU), matching inflation rates. This demonstrates its ability to attract new subscribers in a saturated market, leading to growth in both revenue and EBITDA margins.
Analysts believe AT&T Inc (NYSE:T) is on track to reduce its debt to a net debt-to-adjusted EBITDA ratio of 2.5x by the first half of 2025, which should secure its nearly 6% dividend and boost shareholder returns.
On the financial front, AT&T reduced its net debt by $5.1 billion while growing EBITDA, with a low average interest rate of 4.2%, resulting in manageable annual interest payments of around $5.5 billion. Analysts believe AT&T Inc (NYSE:T) 2024 outlook remains strong, with 3% adjusted EBITDA growth, robust revenue, and significant capital investment for future growth.
With a solid single-digit P/E ratio and $17.5 billion in free cash flow, analysts believe AT&T Inc (NYSE:T) is well-positioned to cover its dividend and pursue share buybacks, making it an attractive option for patient investors.
While we acknowledge the potential of AT&T Inc (NYSE:T), 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 timeframe. If you are looking for an AI stock that is more promising than T but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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