We recently published a list of Jim Cramer Latest Portfolio: 10 Stocks to Watch in September. Since Southern Co (NYSE:SO) ranks 7th on the list, it deserves a deeper look.
Jim Cramer said during his latest program on CNBC that the Federal Reserve wanted to contain inflation and make sure it’s going in the “right direction” before initiating its first rate cut. With the first aggressive rate cut, Cramer believes “most businesses” can thrive.
Cramer, who is currently in Silicon Valley, said technology companies are, however, not “hostage” to the Fed and they are “automaters.” He said these companies are trying to raise margins by automating “what can be automated.”
Jim Cramer said currently cash is flowing towards companies that “would have been doomed” if the Fed didn’t start cutting rates. He said this was “day one” in many more rate cuts to come, which would create a “backdrop of positivity” for the broader market.
For this article, we chose 10 important stocks Jim Cramer talked about during his latest programs on CNBC. 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).
Southern Co (NYSE:SO)
Number of Hedge Fund Investors: 32
When asked about Southern Co (NYSE:SO), Cramer said that the company’s dividend yield is “not that much.” However, he said the company’s big “nuke operation” is “fabulous.”
Cramer called Southern Co. a “baby growth story.”
Southern Co (NYSE:SO) is positioning itself as a key player in meeting rising power demand, with a strong focus on nuclear energy. Its Vogtle Unit 3 is one of only three nuclear power additions in the U.S. since the 1990s. Vogtle Unit 4, which began operations in April 2024, can supply carbon-free electricity to around 500,000 homes and businesses for up to 80 years.
As of the second quarter of 2024, the company’s energy mix is largely clean, with coal accounting for just 17%, while natural gas makes up 48%, and nuclear and renewables comprise the rest. Southern Co (NYSE:SO) added 14,000 new residential customers in its electric businesses and 6,000 in its natural gas division during the quarter.
With nearly 200 potential projects and over 30 gigawatts of load growth on the horizon, Southern Co (NYSE:SO) is well-positioned to capitalize on increased energy demand in the coming decade.
Southern Co (NYSE:SO) shares are up about 26% so far this year. The stock is a bit overvalued, trading at a P/E of 21, compared with the industry average of 18. Wall Street expects the company’s revenue to grow just over 3% next year. The stock’s dividend yield is also low when compared with peers.
Overall, Southern Co (NYSE:SO) ranks 7th on Insider Monkey’s list titled Jim Cramer Latest Portfolio: 10 Stocks to Watch in September. While we acknowledge the potential of Southern Co (NYSE:SO), 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 SO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These Stocks.
Disclosure: None. This article is originally published at Insider Monkey.
