Jim Cramer’s Game Plan: 9 Stocks in Focus

1. KB Home (NYSE:KBH)

Number of Hedge Fund Holders: 32

Mentioning that we should keep “an eye on what’s bad so we’re ready”, Cramer kicked off this week’s game plan by highlighting KB Home (NYSE:KBH), which reports earnings after the close on Monday.

“The home builder has inflation issues and has mortgage issues, right? Rates are too high. The stock’s down from just under $90 to around $60. So you could say those are now baked into the stock price but some investors thought the same way about Lennar, another national home builder. They reported an upside surprise on earnings but talked about how housing prices are going down albeit slowly, but that was certainly enough to kill that stock.

So I don’t see a bottom in KB Home, especially when it was trading at $42 in the fall of 2023. The stock’s had a relentless run. Time to bide your time, wait for a better moment. For the record, if you insist on owning a home builder, do you mind if you just go with Toll Brothers? I think that’s best of breed. Lennar did shake off more than half its losses by day’s end, closing at $115, that’s only down five. I saw it at one point down 12. Lurking behind all the negativity here is the likelihood, yes, of a recession, recession aided by stagflation.”

KB Home (NYSE:KBH) is a residential construction company that builds and sells a range of homes while also offering financial services such as insurance, title services, and mortgage banking.

While we acknowledge the potential of KB Home (NYSE:KBH) 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 time frame. If you are looking for an AI stock that is more promising than KBH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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