We recently published a list of Jim Cramer’s Latest Calls: 10 Stocks You Should Not Miss. In this article, we are going to take a look at where Block Inc (NYSE:SQ) stands against other Jim Cramer’s latest stock picks you shouldn’t miss.
Jim Cramer in a latest program on CNBC talked about earnings results from some of the top consumer and retail companies and said, as a compliment, that America has become a nation of “cheapskates” where consumers are unwilling to pay more when there’s little or no value.
“There’s something happening here, and what it is is exactly clear: we’ve become a nation of cheapskates. I say that as a compliment. Nobody gets away with charging too much anymore—not in this country, no matter the industry, perhaps even the drug industry. It’s happening now, it’s happening fast, and many companies are being left behind by the change. I see it everywhere I go—in the grocery store, online, in the mall, and, of course, in the stock market.”
Cramer talked about how restaurants that offer cheaper but quality meals are seeing a surge in their stock prices amid rising revenues. He also discussed how weight-loss drugs are impacting companies that sell alcohol products.
“American people are tired of paying up. They feel gou, they feel betrayed, they feel that the only thing about brand loyalty is that it isn’t worth a dime. They want a better deal. They’ll eagerly switch lifetime habits in order to save some money because prices are up so much that you feel like an idiot if you’re paying up.”
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For this article we watched latest programs of Jim Cramer aired on CNBC and picked 10 stocks he’s talking about. 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).
People using the Cash App paying for goods and services, highlighting the impact the of the company’s payment tools.
Block Inc (NYSE:SQ)
Number of Hedge Fund Investors: 59
Jim Cramer was recently asked about Block Inc (NYSE:SQ) during a program on CNBC. He said the stock has more room to run.
“I don’t know Jack Dorsey but Amita (Block CFO) does a terrific job. I will tell you this: I’ve been behind the stock for a very, very long time, even since the previous CFO. The stock has now had a major move at last, and it’s not done.”
In the third quarter, Block Inc (NYSE:SQ) gained from steady gross profit momentum across its core businesses, with Cash App now accounting for the bulk of Block’s gross profit. Cash App Card users reached 24 million in the September quarter, marking an 11% year-over-year increase. The growing adoption of the Cash App Card remains a key driver. Block Inc (NYSE:SQ)’s forward price-to-earnings ratio stands at 16.7X, placing its valuation in line with PayPal (PYPL). However, Block Inc (NYSE:SQ) is projected to grow its EPS roughly 3.4 times faster than PayPal over the long term, making its valuation appear particularly attractive. At 16.7X forward earnings, the stock trades at a 51% discount to its historical average P/E ratio.
Columbia Contrarian Core Fund stated the following regarding Block, Inc. (NYSE:SQ) in its Q2 2024 investor letter:
“Block, Inc. (NYSE:SQ) – It is hard to pinpoint why the stock moved lower in the last two months of the quarter, but the most likely reason seems to be simply that investor sentiment on the stock remains generally quite negative for the near term. Investors seem to be taking recent comments from Jack Dorsey (CEO of Square, who also heads Square’s parent company, Block) to mean that a lot still needs to be fixed, rather than the perspective that Mr. Dorsey is being honest and straightforward that things weren’t working and that Square now has a clear plan and a lot of urgency behind its initiatives. The reinvigoration of Square appears very real, with a bold vision to become a generational technology company. The organization is aligned on making Square and Cash App a vertically integrated commerce platform for both sellers and consumers. For Square, this means achieving a growth rate similar to its early days with much better technology while, for Cash App, success is defined as becoming the leading primary bank for those making less than $150,000 per year, along with significant success combining the two ecosystems. The experimentation and innovation culture is back with buy-in across the organization, with a key focus on engineering discipline and exceptional products. This discipline had been lost and is now coming back and should create much better product experiences that are customer-problem focused and enable the company to regain its prior pace of market share gains.”
Overall, SQ ranks 7th on our list of Jim Cramer’s latest stock picks you shouldn’t miss. While we acknowledge the potential of SQ, 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 SQ 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.