In this article, we will take a detailed look at the 10 stocks to buy according to Jim Cramer for long-term growth.
On his Friday show, Jim Cramer discussed the “tyranny of larger macro forces,” lamenting how the market has become overly fixated on broad economic indicators like interest rates and the Fed’s actions instead of keeping their eyes on the prize—great stocks with great stories.
The “short-term guessing game based on the data point of the day” can blindside investors to the long-term glory of what is in front of them, according to Cramer, who also expressed his disdain for ETFs by stating:
“..there could be a pickup in semiconductors if the economy accelerates so we buy an ETF that has semis rather than just going after Nvidia for AI or Texas Instruments for the Internet of Things.”
The backdrop to these comments was the U.S. stock market experiencing a significant rally following the release of encouraging jobless claims data. The S&P 500 jumped by 2.3%, reflecting widespread gains across multiple sectors. The Dow Jones Industrial Average surged by 683 points, highlighting strong performance among blue-chip stocks, while the NASDAQ Composite climbed 2.87%, driven by a rebound in technology and growth stocks.
This rebound helped the S&P 500 recover nearly all losses from earlier in the week, when recession fears and the unwinding of a global yen-funded carry trade led to a sharp decline.
Analyzing Jim Cramer’s recent “Mad Money” episodes, we made a list of 10 stocks that the veteran CNBC host is bullish on. These are companies that are well-poised for long-term growth, given that investors are able to hold their ground and “ignore the chatter.”
The reason we track what hedge funds are doing and their favorite stocks 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).
10. RadNet, Inc. (NASDAQ:RDNT)
Number of Hedge Fund Investors: 28
RadNet, Inc. (NASDAQ:RDNT) is a leading provider of outpatient diagnostic imaging services such as MRI, CT, PET/CT, and mammography. Cramer thinks the stock is “quite a good story”, and he’s not wrong given that it has jumped 62.44% in the last 6 months as of August 9.
Analysts point to RadNet’s expanding imaging center network as a growth driver, as well as its integration of AI technology to enhance diagnostic accuracy in cancer detection. Some headwinds around broader market volatility and competitive pressures within the healthcare sector do exist but nothing substantive enough to faze Jim Cramer from recommending RadNet, Inc. (NASDAQ:RDNT).
9. Zimmer Biomet Holdings, Inc. (NYSE:ZBH)
Number of Hedge Fund Investors: 41
Zimmer Biomet Holdings, Inc. (NYSE:ZBH), a medical device company, is a market leader in hip and knee replacements. The company’s strong innovation in orthopaedic solutions is expected to drive long-term growth, despite some near-term headwinds such as the impact of currency fluctuations on revenue.
Cramer holds that Zimmer Biomet Holdings, Inc. (NYSE:ZBH) offers great value for investors right now, stating that even though it “has some of the best tech you’ll ever find in the industry….this stock’s actually down 11% for the year.”
8. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Investors: 65
Cramer thinks that Costco Wholesale Corporation (NASDAQ:COST) stock is a “buy, buy, buy”.
The largest membership-only warehouse club chain in the country recently received an unchanged “Buy” rating from Goldman Sachs, with a price target of $585. The bank’s analysts took notice of Costco’s ability to maintain customer loyalty through its “membership” model, with a 7% year-over-year increase in membership fee income at $1.15 billion.
Costco Wholesale Corporation (NASDAQ:COST) is also in the midst of expanding its e-commerce division with sales growing 8.5% y/y.
7. Shopify Inc. (NYSE:SHOP)
Number of Hedge Fund Investors: 65
Cramer recently said he likes Shopify Inc. (NYSE:SHOP) “very very much” and that the company’s investments which might have seemed excessive earlier are now “paying off.”
In July, Goldman Sachs analyst Gabriela Borges upgraded the stock to “Buy” from “Neutral” with an increased price target of $74, noting that the company’s marketing investments are starting to bring in results that will drive revenue growth into the next year.
Shopify Inc. (NYSE:SHOP) disclosed revenue of $1.7 billion for the second quarter of 2024, showing a year-over-year increase of 31%. This is a result of the increasing adoption of e-commerce by businesses worldwide and the expansion of Shopify’s product offerings, further solidifying its position as a market leader.
6. The Charles Schwab Corporation (NYSE:SCHW)
Number of Hedge Fund Investors: 71
In response to a caller on the show, Cramer said that he would buy The Charles Schwab Corporation (NYSE:SCHW) stock and that he happens to “like Schwab very much…”
The financial services company has faced some short-term headwinds due to market volatility and interest rate concerns.
But Cramer holds that these issues are temporary and will not hamper the long-term growth prospects for The Charles Schwab Corporation (NYSE:SCHW). Goldman Sachs recently kept a “Buy” rating on the stock with a price target of $72. The bank cited Schwab’s consistent client growth and disciplined expense management as positive indicators.
5. DoorDash, Inc. (NASDAQ:DASH)
Number of Hedge Fund Investors: 76
DoorDash, Inc. (NASDAQ:DASH) posted better-than-expected numbers across key metrics, including total orders, gross order volume, revenue, and contribution profit. Revenue for Q2 2024 stood at $2.63 billion, surpassing analyst expectations by $91.99 million.
Consumers are willing to spend regularly on food delivery – as Jim Cramer put it, “many people got so used to the convenience of these delivery apps during the pandemic that they’re now seen as a necessity.”
In early August, Oppenheimer analyst Jason Helfstein maintained a “Buy” rating on DoorDash, Inc. (NASDAQ:DASH) stock with a price target of $145.
4. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Investors: 79
Jim Cramer is telling callers to his CNBC show to “definitely” hold on to Vistra Corp. (NYSE:VST) stock, which makes sense given that it has risen 106.57% in the year to date as of August 9.
Vistra Corp. (NYSE:VST) is based in Texas and acts as one of the largest integrated power producers in the country. At the end of May, Morgan Stanley reiterated its “Buy” rating for Vistra Corp. (NYSE:VST) with a price target of $110, up from $86. Analysts believe the firm’s focus on renewable energy and its robust cash flow generation are key factors supporting shareholder value and long-term growth.
Legacy Ridge Capital had this to say about Vistra Corp. (NYSE:VST) in its Q2 2024 investor letter:
“One of the sectors we know well which had been out of favor for several years has quickly come into favor: Independent Power Producers (IPPs). We’ve written consistently about NRG and Vistra Corp. (NYSE:VST) since the 2019 letter, have owned each, or both, since 2018, and invested a meaningful amount of our assets in VST specifically the past few years. Nate and I intend on spending more time in the year-end letter on our updated views on the IPPs and our learnings from the on-going investment, but we were a bit surprised how quickly the narrative around these companies changed. Our Blue Sky 2030 estimates of intrinsic value converged with the share price 6-years before we thought probable. In the 2019 letter, with respect to VST, we wrote:
“Over the next decade management should have close to $15 Billion to deploy to share repurchases. If you assume they have to pay an average price for the stock that’s higher than the current one, and they can only repurchase 60% of shares outstanding instead of the 100% the math implies, FCF per share in 2030 would be $14. That’s a $70 stock at today’s valuation, but a $140 stock at a more reasonable FCF yield of 10%.” And… “The IPPs are un-investable for most money managers, so there we are. When they become investable we’ll probably be long gone.”
3. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Investors: 109
Cramer was nothing short of praises for the exceptional performance of Eli Lilly and Company (NYSE:LLY) stock, which has jumped by more than 50% in the year to date. The success of its GLP-1 drugs for diabetes and obesity was a major contributor to its strong financial results, leading the company to raise its full-year guidance.
The ‘Mad Money’ host considers Eli Lilly and Company (NYSE:LLY) a “best of breed” stock with strong prospects. BMO Capital rates Eli Lilly and Company (NYSE:LLY) a “Buy” with a $1,101 price target, citing strong potential in its diabetes and obesity treatment pipeline.
2. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Investors: 130
Uber Technologies, Inc. (NYSE:UBER) recently reported quarterly revenue of $10.7 billion, representing a 15.9% increase year-over-year, and an EPS of $0.47 which surpassed analyst expectations by $0.15.
Uber Technologies, Inc. (NYSE:UBER) in August received an upgraded “Buy” rating from Citigroup, with an increased price target of $96. The bank expressed confidence that the California-based giant can capitalize on growing demand in the ride-sharing and food delivery markets, which Cramer contributes to changing consumer habits around food-delivery services.
1. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Investors: 150
Cramer called the iPhone-maker “the usual suspect of the Magnificent 7”, explaining how blue-chip tech led the session after news of encouraging jobless claims hit the market on Friday morning.
Morgan Stanley recently maintained its “Buy” rating on Apple Inc. (NASDAQ:AAPL) with a price target of $273, highlighting the stock’s potential for a 28.4% upside. This optimistic outlook is driven by expectations of an “iPhone supercycle” and the anticipated impact of Apple’s upcoming innovations, including the iPhone 16 and the Apple Vision Pro.
While we acknowledge the potential of AAPL as an investment, our conviction lies in the belief that some 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 AAPL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.”
- READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article was originally published at Insider Monkey.
