Jim Cramer, host of Mad Money, reviewed the most significant market events for this week on Friday, including earnings reports from various companies. He also pointed out that Wall Street’s anxiety is expected to persist as uncertainty over tariff policies continues.
“Looking forward to next week for a game plan, I’m focused on the unrelenting negativity and how it’s bringing about real but ignored values, ignored because it’s very hard to buy stocks ahead of the tariffs and a Fed that’s no longer willing to help by cutting interest rates, at least for the moment.”
READ ALSO: 9 Stocks on Jim Cramer’s Radar and Jim Cramer Discussed These 10 Stocks Recently
Cramer highlighted that on Thursday, pending home sales will be reported, which could offer a clearer picture of the housing market’s current state. He mentioned that while some companies are reporting troubling signs, it is important to assess whether these are isolated issues or part of a broader slowdown in the housing market.
The data could provide the much-needed clarity that the Federal Reserve cares about, especially since there is a lot of uncertainty surrounding the housing sector. In addition to the home sales data, Cramer pointed out that personal consumption expenditure (PCE) numbers will also be released on Thursday. He said that the PCE is the Federal Reserve’s preferred measure of inflation, but Cramer noted:
“Unfortunately, hasn’t been a good one. Sentiment … seems to be turning south.”
Although, he admitted that it is hard to say for certain. The global geopolitical concerns are contributing to this uncertainty, but Cramer stressed that hard data to support this shift in sentiment is still lacking. Cramer also mentioned that he is especially looking forward to the University of Michigan Consumer Sentiment Index, which is set to be released on Friday. The data could provide valuable insight into the public’s mood, and if the numbers are significantly negative, it would confirm the downtrend he has been seeing in the market over the past few weeks.
“So here’s the bottom line: There’s a lot going on next week, but until we get some resolution on the trade front, you need to expect more uncertainty, more volatility like we saw today. There’s just too much negativity, and for the moment it seems impossible to fight it. Although when it gets extreme for no reason as it did this morning, you still have to pounce if only for a trade.”
Our Methodology
For this article, we compiled a list of 9 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on March 21. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the fourth quarter of 2024, which was taken from Insider Monkey’s database of over 1,000 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Jim Cramer’s Game Plan: 9 Stocks in Focus
9. Dutch Bros Inc. (NYSE:BROS)
Number of Hedge Fund Holders: 41
Cramer mentioned Dutch Bros Inc.’s (NYSE:BROS) investor day event on Thursday and commented:
“We also have an investor day event for Dutch Bros. I like the BROS and I like the BROS CEO, Christine Barone. Well, man, oh man, this is one expensive stock, regional and national growth story for the coffee chain is still very much in place, which means Dutch Bros can be bought on weakness.”
Dutch Bros (NYSE:BROS) operates and franchises drive-thru locations across the U.S. under various brands, including Dutch Bros Coffee and Dutch Bros Rebel. Polen Capital stated the following regarding the company in its Q4 2024 investor letter:
“Dutch Bros Inc. (NYSE:BROS), a drive-through coffee and beverage company with nearly 1,000 locations, reported compelling quarterly results, raising its full-year revenue and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) guidance. Robust same-store sales and steady unit growth have driven top-line growth of +28% year-over-year. Earnings growth appears poised to accelerate as the company ramps up unit growth in 2025, innovates its menu (into the untapped opportunity to drive food sales), and margins inflect higher with scale. We believe it’s still early days for Dutch Bros, which has a unique concept and is just starting to tap into proven value drivers like online ordering and food. We believe Dutch Bros has the potential to be a substantially long-duration EPS (earnings per share) growth business.”
8. Lululemon Athletica Inc. (NASDAQ:LULU)
Number of Hedge Fund Holders: 60
Lululemon Athletica Inc. (NASDAQ:LULU) was commented on during the recent episode of Mad Money, and here’s what Cramer said:
“Thursday, we’re going to hear from Lululemon. And oh man, this is a battleground, I mean, just incredible. Lots of short sellers betting that Lulu won’t sell enough because of its high price point. I think this is a remarkable company that makes me want to buy the stock on any weakness.”
Lululemon (NASDAQ:LULU) creates, produces, and markets athletic clothing, footwear, and accessories. Appearing on Squawk on the Street in early March, Cramer stated:
“Athleta, David, could be taking share from Lulu. I asked whether there was an existential threat to Lulu. Lulu’s much more expensive. . .everything is much more expensive.”
7. Chewy, Inc. (NYSE:CHWY)
Number of Hedge Fund Holders: 48
Highlighting Chewy, Inc. (NYSE:CHWY) as he laid out his game plan for this week, Cramer said:
“Be sure to pay attention to Chewy when it reports on Wednesday morning. This online pet food stock, store has been going strong now for the last two quarters ever since they called the bottom on Mad Money. They’re crushing it.”
Chewy (NYSE:CHWY) is an online retailer that provides a broad selection of pet products, including food, treats, supplies, medications, and services for pets like dogs, cats, and reptiles. Back in January, when a caller asked about ELAN stock, Cramer steered them toward CHWY as he said:
“Not my favorite. I do think that the pet… Look, I like Chewy. I know that’s a pedestrian way to look at things, but I think that Chewy is the better bet for this group.”
6. Paychex, Inc. (NASDAQ:PAYX)
Number of Hedge Fund Holders: 36
Cramer’s worries for companies like Paychex, Inc. (NASDAQ:PAYX) were apparent as he said:
“We got a pair of small business-oriented companies that will report Wednesday, Cintas and Paychex… As for Paychex, this payroll processor has a lot of bearish analysts covering it and I gotta tell you something, they got smoked in that last quarter, just smoked by the great numbers. Paychex, I think it’s going to continue to do well.”
Paychex (NASDAQ:PAYX) offers integrated human capital management solutions, including payroll, HR, benefits, insurance, and retirement plan administration, with a focus on serving small to medium-sized businesses. As per its outlook for the fiscal year 2025, the company expects total revenue to grow by 4% to 5.5% in fiscal year 2025.
Paychex (NASDAQ:PAYX) anticipates interest on client funds will range from $145 million to $155 million, with other net income between $30 million and $35 million. Operating income margin is projected to be between 42% and 43%, leaning toward the higher end. It also expects adjusted diluted earnings per share to grow by 5% to 7%.
5. Cintas Corporation (NASDAQ:CTAS)
Number of Hedge Fund Holders: 56
Commenting on small business-oriented companies like Cintas Corporation (NASDAQ:CTAS), Cramer stated:
“We got a pair of small business-oriented companies that will report Wednesday, Cintas and Paychex. Cintas, French uniforms, provides many other services to small, medium-sized businesses. Last time it reported, the market didn’t like it and the stock got drilled. I’m worried about small business formation right now, and therefore, I have to worry about a company like Cintas that sells uniforms and then takes care of them.”
Cintas (NASDAQ:CTAS) offers corporate uniforms and related business services, as well as products and services for first aid, safety, and fire protection. Aoris Investment Management stated the following regarding Cintas Corporation (NASDAQ:CTAS) in its Q4 2024 investor letter:
“Firstly, I think we exercised good valuation discipline in our sales of Costco and Cintas Corporation (NASDAQ:CTAS). The share prices of these two companies had increased by more than 60% and 40% respectively in the year prior to our sale. It can be difficult as investors to remain objective and not ‘fall in love’ with an investment when it is performing well. A higher share price doesn’t make a business more valuable!
We sold both Costco and Cintas simply for reasons of valuation. These are exceptional businesses that we’d love to own again if valuation permits. Their sales allowed us to recycle portfolio capital into more attractively valued businesses.”
4. Dollar Tree, Inc. (NASDAQ:DLTR)
Number of Hedge Fund Holders: 64
Discussing that dollar stores used to be loved, Cramer mentioned that companies like Dollar Tree, Inc. (NASDAQ:DLTR) do not offer value propositions anymore.
“Wall Street used to love the dollar stores because, unlike most retailers, they kept putting up stores and generating good growth. They went in neighborhoods, other retailers steered clear of, carrying what looked like inexpensive merchandise. Well, that changed during the pandemic. They raised their prices and raised them and raised them in order to pass on the value proposition and it’s never been the same, right? There is no value proposition. These days, the reduced sizes often give you the appearance of value, but people know when they’re getting had. That’s why I’d stay away from Dollar Tree. This thing does not represent the kind of value that we want or that I used to get when we used to go there all the time. By the way, even Walmart’s struggling. So when Dollar Tree reports Wednesday, I’m not thinking it’s gonna be great.”
Dollar Tree (NASDAQ:DLTR) runs discount retail stores that provide a wide variety of consumables, household goods, seasonal items, clothing, and electronics under its Dollar Tree and Family Dollar brands.
3. GameStop Corp. (NYSE:GME)
Number of Hedge Fund Holders: 24
Remarking that one cannot “game” GameStop Corp. (NYSE:GME), Cramer said:
“After the close, we hear from GameStop. Now this stock has…a propensity to go up, both before and during the earnings report and then it just starts to lag because nothing ever really happens. Maybe they’ll announce some plan to lever up and buy some Bitcoin. In the end, you can’t game GameStop.”
GameStop (NYSE:GME) is a specialty retailer offering new and pre-owned gaming products, accessories, software, collectibles, and digital content, and is also involved in the digital asset wallet and NFT markets. In February, when Cramer was asked about the company, he commented:
“I think, I’ll tell you, if you want games, you gotta be in Take-Two because Take-Two’s gonna have a Grand Theft Auto brand new edition this year and that’s the one to be in. I mean, you gotta have momentum. I mean, look at what happened to EA, uh-uh, so I can’t recommend GameStop, I just know it’s a meme stock. But if you want a meme stock, of course, you just buy Palantir. I think everyone should just go buy Palantir. I mean like Palantir, it’s like, what can I say? Alex Karp, I think he’d find you if you didn’t buy Palantir and give you a little talking to.”
2. McCormick & Company, Incorporated (NYSE:MKC)
Number of Hedge Fund Holders: 40
McCormick & Company, Incorporated (NYSE:MKC) was mentioned during the episode, and here’s what Mad Money’s host had to say:
“Now if you think that’s in the cards, if you think we have recession, you should really consider buying McCormick, which reports Tuesday. This spice company’s been putting up big numbers, but even better, you buy their seasonings when the economy rolls over because during a recession, people do less dining out, more cooking at home. Very positive from McCormick, which dominates the spice and seasoning aisles.”
McCormick (NYSE:MKC) manufactures and supplies a wide range of spices, seasoning blends, condiments, and other flavorful products for the food industry. In October 2024, Cramer commented:
“I think buying it right here is a very good idea… I thought that McCormick did a good job when the company was on the show… I know it’s a staple, and the staples are out of favor when the Fed cuts, but I think that they’re doing a very good job. Brendan Foley really explained the situation well.”
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.
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