Jim Cramer, the host of Mad Money, recently raised concerns about the current state of the market, particularly highlighting what he perceives as signs of “excess”. He also examined what he referred to as “Trump trades,” or stocks that Wall Street has been gravitating towards in anticipation of what President-elect Donald Trump’s administration might bring.
He pointed to private prison operators and oil service companies as examples of sectors benefiting from these expectations. Focusing on oil, Cramer noted that a number of smaller oil service stocks have surged this month. He pointed out:
“Now one of the few things that we know for certain about President-elect Trump’s economic agenda is that he wants our country to produce even more oil than it’s doing. His new pick for treasury secretary, that’s Scott Bessent, has advocated for the country to produce an incremental 3 million barrels of oil per day.”
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Cramer sees this as positive news for oil service companies involved in the extraction of resources. However, he also warned that this surge in production could exert downward pressure on oil and gas prices, much like what occurred in 2016. Despite this, Cramer highlighted that the major players in oil services have posted impressive gains in November, with some smaller operators making unexpected appearances on the list of the market’s hottest stocks. Shifting to the cryptocurrency market, Cramer addressed the significant rise in Bitcoin’s value. He noted:
“Now that rally is taking up practically the whole cryptocurrency ecosystem… Obviously, the gains in crypto, especially the Bitcoin ecosystem, seem excessive, but again, they aren’t without reason. We’re going from a Biden regime that was pretty antagonistic towards crypto to a second Trump administration that promised to be incredibly crypto-friendly.”
Cramer also pointed out that under the Biden administration, the government had been more paternalistic, aiming to regulate and control crypto, while Trump has promised a much more supportive stance towards Bitcoin. Cramer believes that a Trump administration that actively supports Bitcoin could lead to significant hoarding of the cryptocurrency, especially in the context of a strategic Bitcoin reserve.
This could benefit Bitcoin holders or “hodlers,” as they are often called in the crypto community. He also suggested that owning Bitcoin or an ETF that tracks its performance could serve as a hedge against potential inflation, particularly if the government continues to print money to address its deficit. Cramer voiced his own support for Bitcoin, saying, “call me in favor of owning Bitcoin,” and also recommended purchasing Ethereum, which he owns, despite it lagging behind Bitcoin in recent performance.
“I’m a believer, but these are hedges for me, and if you’re hoarding crypto, be ready for the breakdown no one thinks can come.”
Jim Cramer Discussed 13 Stocks Poised to Benefit From the New Administration
Our Methodology
For this article, we compiled a list of 13 stocks that were discussed by Jim Cramer during a recent episode of Mad Money on November 25. 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).
13. Federal National Mortgage Association (OTCQB:FNMA)
Number of Hedge Fund Holders: N/A
Cramer noted that the rallying of Federal National Mortgage Association (OTCQB:FNMA) stock in November was understandable as the election turned out in Trump’s favor.
“What else? Oh, here’s a tough one. Fannie Mae and Freddie Mac, two government-sponsored enterprises that prop up the mortgage market, have seen their stocks more than double on hopes that Trump will recapitalize and release these companies. I don’t know if you remember them from the Great Recession. Oh boy, they were front and center. I don’t wanna get too deep in the weeds on this tonight because it’s a complicated situation, but in general, it makes sense for Fannie and Freddie to rally on this Republican sweep.”
Federal National Mortgage Association (OTCQB:FNMA), commonly known as Fannie Mae, provides mortgage financing solutions in the United States, including the securitization and purchase of various types of residential and multifamily mortgage loans, as well as credit enhancement for bonds and investments in housing projects. It reported a strong performance in the third quarter, achieving $4.0 billion in net income.
This marked the company’s twenty-seventh consecutive quarter of positive results, reflecting consistent operational success. Its net worth grew to $90.5 billion, a notable increase. Since the beginning of the year, the company has reduced its minimum regulatory capital shortfall by $17 billion, further strengthening its financial position.
Despite the ongoing challenges in housing affordability, the Federal National Mortgage Association (OTCQB:FNMA) continued to provide vital liquidity to the housing market. In the third quarter, the company facilitated $106 billion in liquidity, helping 383,000 households with purchasing, refinancing, or renting homes.
12. Federal Home Loan Mortgage Corporation (OTCQB:FMCC)
Number of Hedge Fund Holders: N/A
At the time of writing on November 28, Federal Home Loan Mortgage Corporation (OTCQB:FMCC) stock was up 156.56%. Here’s what Mad Money’s host had to say:
“What else? Oh, here’s a tough one. Fannie Mae and Freddie Mac, two government-sponsored enterprises that prop up the mortgage market, have seen their stocks more than double on hopes that Trump will recapitalize and release these companies. I don’t know if you remember them from the Great Recession. Oh boy, they were front and center. I don’t wanna get too deep in the weeds on this tonight because it’s a complicated situation, but in general, it makes sense for Fannie and Freddie to rally on this Republican sweep.”
Federal Home Loan Mortgage Corporation (OTCQB:FMCC) operates in the U.S. secondary mortgage market, purchasing, securitizing, and guaranteeing both single-family and multifamily loans, while managing associated credit, market risk, and investments. For the third quarter, the company reported net income of $3.1 billion, reflecting a $0.4 billion increase year-over-year.
This growth was mainly attributed to a decrease in non-interest expenses, as the prior year’s figures included a one-time $0.3 billion additional expense accrual. Net revenues also saw a 3% increase from the previous year, totaling $5.8 billion, largely driven by higher net interest income.
As reported by the Wall Street Journal in September, allies of Republican candidate Donald Trump, along with bankers, have been considering plans to end government control over Federal Home Loan Mortgage Corporation (OTCQB:FMCC) and Fannie Mae.
Among the proposed paths for privatization is a strategy to bypass congressional approval and instead work through the Federal Housing Finance Agency (FHFA), which oversees both entities, as well as the U.S. Treasury Department. This follows previous, unsuccessful attempts to free the mortgage giants from government control, including those made during the Trump administration.
11. Natural Grocers by Vitamin Cottage, Inc. (NYSE:NGVC)
Number of Hedge Fund Holders: 9
Cramer called Natural Grocers by Vitamin Cottage, Inc. (NYSE:NGVC) stock gain in November excessive and said:
“How about Natural Grocers by Vitamin Cottage, which is up more than 71% for the month. This stock, which I’ve never heard of, is presumably rallying on the appointment of RFK Junior, AKA Bobby Jr. as Secretary of Health and Human Services. He’s got some nutty views on vaccines, a little critical of big pharma there, but he is also a health food nut. Still, that 71% run in the little-known Natural Grocers, I’m calling excessive.”
Natural Grocers by Vitamin Cottage (NYSE:NGVC) operates retail stores that offer a wide range of natural and organic groceries, dietary supplements, body care products, pet care items, and household goods, including both private-label and name-brand products. The company reported positive results for the fourth quarter, with a 7.1% increase in daily average comparable store sales growth, and a 14.0% increase on a two-year basis.
Net income rose by 53% during the same period. Over the past five years, the company has experienced significant growth, with net sales increasing by 37%, and diluted earnings per share more than tripling. During this time, the company has also returned $108 million in capital to shareholders through cumulative cash dividends of $4.76 per common share.
In response to questions about the potential impact of the appointment of RFK Jr., Natural Grocers by Vitamin Cottage (NYSE:NGVC) Co-President Kemper Isely shared that the company would welcome greater awareness of the importance of natural food choices. He emphasized that the company’s commitment to not allowing artificial additives in its products sets it apart as an authentic player in the natural foods market.
10. MARA Holdings, Inc. (NASDAQ:MARA)
Number of Hedge Fund Holders: 12
Commenting on MARA Holdings, Inc. (NASDAQ:MARA), Cramer said that the stock was up 57% as of Monday. In early November, the company successfully raised $980 million in net proceeds from a $1 billion private placement of convertible senior notes. This offering, which included a full $150 million option exercised by initial investors, was oversubscribed, reflecting strong demand.
In the third quarter, the company increased its mining capacity by 372 megawatts (“MW”) in Ohio, which included acquiring a 222 MW site at a cost of $270,000 per MW. Additionally, it secured the development of a 150 MW greenfield site. The company also launched a 25 MW micro data center operation across wellheads in Texas and North Dakota, aimed at converting excess flared gas into electricity for use at co-located data centers. This initiative is part of its strategy to own and operate energy generation with near-zero costs.
On November 27, MARA Holdings (NASDAQ:MARA) provided an update to investors regarding its acquisition of bitcoin. As part of the funds raised through the convertible notes offering, the company purchased 6,474 BTC. This acquisition was split into two rounds in November.
The first purchase was for 5,771 BTC, which amounted to nearly $550 million, while the second purchase involved 703 BTC, valued at approximately $65 million. Following these transactions, MARA Holdings’ (NASDAQ:MARA) total bitcoin holdings reached 34,794 BTC.
9. Aris Water Solutions, Inc. (NYSE:ARIS)
Number of Hedge Fund Holders: 19
Cramer called Aris Water Solutions, Inc. (NYSE:ARIS) profitable and mentioned that the stock’s valuation is reasonable.
“Aris Water Solutions offers water management, recycling, and supply solutions to frackers in the Permian Basin. It’s up more than 63%… Once again, big moves there. I can’t say they’re unreasonable. These are three very profitable businesses, reasonable valuations. They’re about to face a much more benign regulatory environment.”
Aris Water Solutions (NYSE:ARIS) is an environmental infrastructure company that specializes in handling and recycling produced water from oil and gas production, and operating facilities to treat, store, and recycle this water. In the third quarter, it reported strong financial results, reflecting growth in both its produced water volumes and recycled water sales. The company also maintained healthy margins during this period.
Net income for the quarter was $16.4 million, an increase from $12.2 million in the same period of 2023 and $13.1 million in the second quarter of 2024. This growth was supported by CPI-linked revenue escalation clauses in its contracts and operational cost improvements made over the past year. These factors contributed to a 13% increase in operating margins per barrel, which reached $0.45 in the third quarter of 2024, compared to the same period last year.
Aris Water Solutions (NYSE:ARIS) continues to explore additional commercial opportunities related to mineral extraction from its produced water streams. The company is currently selecting a site for an iodine extraction facility in partnership with a strategic ally. Additionally, it has been approached by companies that specialize in extracting minerals such as magnesium, ammonia, and lithium. While management expects to have more information on potential future revenues from these opportunities in 2025, no further updates have been provided at this time.
8. Solaris Energy Infrastructure, Inc. (NYSE:SEI)
Number of Hedge Fund Holders: 20
Cramer commented on Solaris Energy Infrastructure, Inc. (NYSE:SEI) stock jumping in November and said:
“Solaris Energy Infrastructure specializes in distributed power generation systems and managing raw materials used in oil and natural gas wells. It’s seen the stock jump 73%… Once again, big moves there. I can’t say they’re unreasonable. These are three very profitable businesses, reasonable valuations. They’re about to face a much more benign regulatory environment.”
Solaris Energy Infrastructure (NYSE:SEI) specializes in providing scalable and mobile equipment-based solutions designed for distributed power generation and the management of raw materials used in the completion of oil and natural gas wells. In the third quarter, it made a significant move by announcing and closing an acquisition that would reshape its operations. On September 11, the company finalized the purchase of Mobile Energy Rentals LLC, a leading provider of distributed power solutions.
In conjunction with the acquisition, the company established a new business segment called Solaris Power Solutions. This segment was created to manage and oversee the newly acquired operations and to report on the performance of this expanded part of the business. Since closing the deal, the company has already made substantial progress.
Solaris Energy Infrastructure (NYSE:SEI) signed several power service contracts with tenors ranging from two to four years, securing over 80% of its expected capacity by the end of 2025. Additionally, the company reported an adjusted EBITDA of $22 million for the third quarter. This represents a 7% increase compared to the second quarter of 2024. The growth in adjusted EBITDA was largely driven by the impact of the Mobile Energy Rentals acquisition, which contributed results for 20 days in the third quarter.
7. MicroStrategy Incorporated (NASDAQ:MSTR)
Number of Hedge Fund Holders: 25
At the time of writing on November 28, MicroStrategy Incorporated (NASDAQ:MSTR) stock was up 69.27% for November. Cramer remarked:
“Of course, MicroStrategy, a former software company that’s now pretty much a leveraged Bitcoin fund has shot up 65%.”
MicroStrategy (NASDAQ:MSTR) is a well-known provider of AI-driven enterprise analytics software and services. In addition to its core software business, the company has become increasingly recognized for its active role in Bitcoin development. Recently, the company has benefited from the surge in Bitcoin prices, which have risen by more than 30% since Election Day while the company stock has soared more than double that.
Michael Saylor, the company’s founder and executive chairman, has commented that the company stock has outperformed Bitcoin itself. According to Saylor, this outperformance is largely due to the company’s approach of leveraging its Bitcoin holdings to maximize returns. In line with its Bitcoin-focused strategy, the company has set an ambitious target of raising $42 billion in capital over the next three years.
This plan, referred to as the “21/21 Plan,” consists of $21 billion in equity and another $21 billion in fixed-income securities. Phong Le, MicroStrategy’s (NASDAQ:MSTR) President and CEO emphasized that the capital raised will primarily be used to acquire more Bitcoin, reinforcing its position as a “Bitcoin Treasury Company.” The goal is to continue building Bitcoin reserves in a manner that can optimize the company’s returns from these assets, thereby enhancing its overall performance.
6. CoreCivic, Inc. (NYSE:CXW)
Number of Hedge Fund Holders: 26
Cramer discussed CoreCivic, Inc. (NYSE:CXW) stock rallying in November, especially after the election results came in. Here’s what he said:
“The two big private prison operators, GEO Group and CoreCivic have rallied 85 and 59% respectively since the beginning of November. These tend to be winners whenever the GOP is in power, but they’re rallying particularly hard this time because Trump ran on an agenda of mass deportations. Keep in mind though, GEO Group and CoreCivic roared from the 2016 election to Trump’s inauguration day in January 2017, but then they spent most of the next four years going lower. My view, legitimate thesis here, but the gains are so extreme that I worry they’re running out of upside.”
CoreCivic (NYSE:CXW) owns and operates correctional, detention, and residential reentry facilities, providing rehabilitation programs and government real estate solutions. As of the third quarter, it reported strong financial results. The company saw an increase in its compensated occupancy, reaching 75.2% in the quarter, up from 72.0% in the same period the previous year.
Net income for the quarter amounted to $21.1 million, or $0.19 per diluted share, compared to $13.9 million, or $0.12 per diluted share, in the third quarter of 2023. During an earnings call, management also provided insights into the U.S. federal prison population trends. At the end of President Obama’s second term, the national population of federal prisoners under the U.S. Marshals Service stood at nearly 47,000. This figure rose to nearly 67,000 under President Trump’s first term, peaking in early 2020 before settling at around 66,000 presently.
In response to ongoing demand and the change in administration, CoreCivic (NYSE:CXW) is working proactively to activate and maximize the use of its available bed capacity, which amounts to about 18,000 beds. The company’s long-standing relationship with U.S. Immigration and Customs Enforcement (ICE) was also highlighted by President and CEO Damon Hininger, who noted that ICE was the company’s first customer.
5. The GEO Group, Inc. (NYSE:GEO)
Number of Hedge Fund Holders: 28
Talking about The GEO Group, Inc. (NYSE:GEO) on Monday, Cramer said:
“The two big private prison operators, GEO Group and CoreCivic have rallied 85% and 59% respectively since the beginning of November. These tend to be winners whenever the GOP is in power, but they’re rallying particularly hard this time because Trump ran on an agenda of mass deportations. Keep in mind though, GEO Group and CoreCivic roared from the 2016 election to Trump’s inauguration day in January 2017, but then they spent most of the next four years going lower. My view, legitimate thesis here, but the gains are so extreme that I worry they’re running out of upside.”
GEO Group (NYSE:GEO) owns, leases, and manages secure facilities and reentry centers, offering services like security, rehabilitation, education, and food services, along with reentry, electronic monitoring, transportation, and facility design and construction. In recent weeks, the company saw an increase in stock value after Donald Trump was elected President, becoming one of the biggest gainers in the U.S. stock market following the election.
During a recent earnings call, Executive Chairman George Zoley addressed concerns regarding federal funding, particularly after the expiration of the continuing resolution on December 20th. He noted that it is likely that Congress will extend the resolution until after the new presidential administration takes office, after which appropriation bills would likely be considered to fund the government for the rest of the fiscal year.
GEO Group (NYSE:GEO) CEO Brian Evans also pointed out that unused bed capacity at the company’s facilities could potentially generate $400 million in annualized revenues if filled. He further highlighted the company’s ability to scale its existing surveillance and monitoring program to cover millions of immigrants, calling it an unprecedented opportunity for additional revenue.
4. Sprouts Farmers Market, Inc. (NASDAQ:SFM)
Number of Hedge Fund Holders: 37
Sprouts Farmers Market, Inc. (NASDAQ:SFM) is a Cramer favorite and he noted that the company is a “high-quality operator”.
“Cramer fave, Sprouts Farmers Market has only run up 15% month to date and it’s part of the same theme. Then again, Sprouts was already doing great on its own before the election because it’s a really high-quality operator that I like very much.”
Sprouts Farmers Market (NASDAQ:SFM) operates in the U.S., retailing fresh, natural, and organic food products, offering a wide range of perishable and non-perishable items under the Sprouts brand. In the third quarter, the company reported a significant 8.4% increase in same-store sales, contributing to a 14% year-over-year rise in overall revenue, which reached $1.95 billion, surpassing estimates.
This growth was partly driven by the company’s ongoing efforts to expand its store footprint, with nine new locations opened during the quarter. The company focuses on smaller, more efficient store formats, which it believes will improve profitability while maintaining a strong market presence. The company continued to innovate within its product lines, keeping consumer interest high and further emphasizing the Sprouts Brand.
By ensuring that most stores are within 250 miles of a distribution center, the company aims to streamline operations and reduce costs. As a result of these efforts, Sprouts Farmers Market (NASDAQ:SFM) achieved significant financial gains. Gross margins expanded, and operating income surged by 40%, reaching $122.5 million. Additionally, EPS grew from $0.64 to $0.91, comfortably exceeding the forecast. With a total of 428 locations across 23 states, the company continues its growth trajectory, strengthening its position in the retail food market.
3. Chart Industries, Inc. (NYSE:GTLS)
Number of Hedge Fund Holders: 40
Cramer highlighted that he recommended Chart Industries, Inc. (NYSE:GTLS) frequently when Mad Money was first started.
“Chart Industries makes highly engineered equipment used in the engineering and in the energy production process and it’s run up 57%. That’s the stock we used to recommend all the time when we first started the show. Once again, big moves there. I can’t say they’re unreasonable. These are three very profitable businesses, reasonable valuations. They’re about to face a much more benign regulatory environment.”
Chart Industries (NYSE:GTLS) designs, engineers, and manufactures equipment and technologies for processing gas and liquid molecules, providing solutions for industrial gases, LNG delivery, natural gas processing, and heat exchangers across various industries. In its third-quarter results, the company reported a performance that did not meet expectations, largely due to the timing of large, high-margin projects. However, despite this, it saw strong growth in incoming orders and an expansion in margins.
During this period, the company achieved a record gross margin of 34.1%, which was driven by successful cost synergies from its acquisition of Howden and other operational efficiencies. The company’s adjusted EBITDA increased by 53.9%, reaching $260.7 million, a reflection of its operational effectiveness. In addition, the company generated $174.6 million in free cash flow, which was primarily used to reduce net debt. This helped lower the company’s net leverage ratio to 3.04 by September 30.
Chart Industries (NYSE:GTLS) also highlighted significant orders from nuclear sector customers during the earnings call, including EDF of France. CEO Jill Evanko mentioned that the company is now serving the “new leader in the space” with its industrial fans. In addition to this, he said that the company provides critical equipment like gas circulators, fans, turbines, and air coolers to support SMR technologies.
2. Coinbase Global, Inc. (NASDAQ:COIN)
Number of Hedge Fund Holders: 42
Cramer mentioned that Coinbase Global, Inc. (NASDAQ:COIN) stock was up 74% as of November 25. The company offers infrastructure and technology for the crypto economy, including financial accounts for consumers, a marketplace for institutional transactions, and tools for developers. In October, it reported approximately $190 million in transaction revenue. The company anticipates that Q4 subscription and services revenue will fall between $505 million and $580 million.
Although the company remains focused on expanding native units in areas such as staking, custody, and on-platform USDC, its Q4 forecast accounts for several challenges. These include a 10% decline in the average price of Ethereum in October compared to the Q3 average, as well as interest rate cuts that reflect market expectations.
In terms of new product offerings, in November, Coinbase (NASDAQ:COIN) launched the Coinbase 50 Index (COIN50), a benchmark tracking the top 50 digital assets listed on Coinbase Exchange that meet specific criteria.
Developed in partnership with Coinbase Asset Management and Market Vector Indexes, the COIN50 helps traders monitor market trends and the overall performance of the cryptoeconomy. The index evaluates assets based on factors like token economics, blockchain structure, and security, with all assets subject to Coinbase’s strict vetting process. Currently covering about 80% of the total crypto market cap, the index is expected to expand further.
1. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 99
Cramer talked about Tesla, Inc. (NASDAQ:TSLA) during his episode of Mad Money on Monday and said:
“There are plenty of one-off Trump trades too, like Tesla, which is up 35% for November. This is all thanks to CEO Elon Musk’s special relationship with President-Elect. Of course, if Musk starts getting on Trump’s nerves, well you can see a serious pullback but you know what? I’d be a buyer on weakness though because I’m a believer in Musk’s leadership.”
Tesla (NASDAQ:TSLA), a leading company in the electric vehicle and energy sector, has experienced a notable surge in its stock price following the U.S. presidential election. The company, founded by Elon Musk, has not only seen financial growth but has also found itself in a more prominent political spotlight. This increase in attention was further amplified when President-elect Donald Trump appointed Musk to a newly established role in November, which focuses on enhancing government efficiency.
Its stock again saw a rise following reports that Trump’s transition team would prioritize creating a federal framework for regulating self-driving vehicles. According to a Bloomberg report on November 17, individuals familiar with the matter indicated that the Trump administration plans to make the regulation of fully autonomous vehicles one of the key focuses of the U.S. Department of Transportation. This move is particularly important for the company, which has heavily invested in autonomous vehicle technology.
At present, federal regulations pose significant challenges to the mass production of fully self-driving cars, a sector in which Tesla (NASDAQ:TSLA) is heavily involved. The current laws prevent the widespread deployment of vehicles without human control. Musk has expressed support for federal rules that would allow the use of self-driving cars across the country and the potential changes to regulatory frameworks under the Trump administration could benefit the company’s ambitions.
While we acknowledge the potential of Tesla, Inc. (NASDAQ:TSLA) 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 TSLA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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