In this article, we will take a detailed look at Jim Cramer’s Latest Calls: 10 Stocks to Buy and Sell Now.
Jim Cramer in a recent program on CNBC yet again talked about the importance of investing in individual stocks and said with discipline and patience beginner investors can beat the market by picking solid stocks with strong fundamentals.
“If you are willing to put in the work, regular people can trounce the averages as long as you are disciplined and you follow the rules,” Cramer said.
Talking about his stock-picking process, Cramer said that he likes to “start” hunting for stocks by going through the list of stocks making new highs. This is a good start, according to Cramer, because a lot of times momentum keeps pushing the same stocks higher and higher unless something fundamentally changes. Cramer said he does not recommend buying stocks when they are trading at new highs. Instead, he waits for a pullback.
“New high list is not a shopping list it’s an inspirational list. You keep an eye on those names and then wait for them to come down before you pull the trigger,” Cramer said.
Cramer said that you should only pile into stocks on a pullback if you believe they will rebound for reasons “unrelated to the broader market.”
For this article, we picked 10 key stocks Jim Cramer is talking about during his programs these days. With each stock, 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).
10. Textron Inc (NYSE:TXT)
Number of Hedge Fund Investors: 26
According to CNBC research, aircraft, defense, industrial company Textron Inc (NYSE:TXT) has historically performed in the beginning of the rate-cut cycles.
Cramer was surprised that the stock performs well during rate cuts, and said:
“I think it could work now that the Fed is cutting rates but keep in mind that Textron will get clobbered if the economy is truly in much worse shape than we think.”
Textron Inc (NYSE:TXT) has the following key business segments:
- Textron Aviation: Specializes in designing, manufacturing, and selling business jets, turboprop aircraft, and piston-engine planes for both civilian and military use.
- Bell: Produces military helicopters and tiltrotors, primarily serving U.S. defense contracts.
- Textron Systems: Provides defense products, including unmanned systems and weapons.
- Industrial: Focuses on selling specialized vehicles and machinery across various industries.
- Textron eAviation: Develops electric and sustainable aircraft solutions.
In the recently reported quarter, Textron Inc (NYSE:TXT) revenue rose to $3.5 billion from $3.4 billion last year, driven by Aviation and Bell segments.
However, the company’s Industrial segment faced headwinds, with revenue dropping 11% and profits plunging 46.8% year-over-year. The decline was driven by reduced demand in the automotive and consumer goods sectors, which management attributed to high interest rates and rising costs for raw materials and labor. Management isn’t anticipating a quick recovery in demand and is instead focusing on cost-cutting measures.
Textron Inc (NYSE:TXT) heavy reliance on U.S. government contracts poses another risk, particularly in the Bell segment, which has secured several key deals, including the DARPA X-Plane and U.S. Navy’s METS programs.
9. Kroger Co (NYSE:KR)
Number of Hedge Fund Investors: 46
Jim Cramer said Kroger Co (NYSE:KR) posted a strong quarterly report but the Albertsons deal is weighing on the stock.
“With Albertsons deal still languishing I think it puts a lid on the stock, that’s unfortunate because I like it very much,” Cramer said.
In another program, Cramer said:
“Kroger Co (NYSE:KR) confounded the critics by developing a superior loyalty program, regionalizing their storage and creating the best store brand private label products out there.”
Cramer also highlighted a comment from the CEO made during the latest earnings call:
“Budget-conscious customers are buying more at the beginning of the month to stock up on essential items and groceries.
And then as the month progresses, they are more cautious with their spending. In response, we are supporting our customers by keeping prices low through promotions, including loyalty discounts, personalized offers and fuel rewards. We are also expanding our multi-tiered portfolio of Our Brands products, which provides customers exceptional alternatives to national brands competing on quality, while at a noticeable lower price point. Our long term model demonstrates that by consistently keeping prices low, we increase customer loyalty and grow share of wallet. While the food-at-home industry remains competitive, our model drives efficiencies that allow us to sustainably invest in value and maintain competitive price spreads with key competitors.
Read the full earnings call transcript here.
Kroger Co (NYSE:KR) reported quarterly sales of $33.91 billion, a modest 0.2% rise from the $33.85 billion posted in the same quarter last year. The figure also surpassed analyst expectations by $207 million.
Kroger Co (NYSE:KR) said there was a 17% surge in delivery sales, driven by the company’s Customer Fulfillment Centers, with its online grocery customer base growing 14%. Kroger’s digital sales strategy, once unexpected in the grocery sector, has gained traction. While data isn’t available, the launch of 223 new Our Brands products likely boosted revenue during the quarter.
8. Target Corp (NYSE:TGT)
Number of Hedge Fund Investors: 52
Jim Cramer quoted a CNBC research report which said Target Corp (NYSE:TGT) has historically performed well when the Fed starts cutting rates. Cramer said the company has got a “terrific” turnaround story.
Cramer highlighted that Target recently reported its first positive same-store sales growth since 2022 driven by “higher traffic, not higher price.”
“I think Target Corp (NYSE:TGT) is doing a lot of things right – controlling costs, growing margins, stopping theft and cutting prices to bring back customers.”
Wall Street expects Target to generate $106.9 billion in revenue this year, with earnings of $9.50 per share, translating to a price-to-earnings (P/E) ratio of 16.16. This is notably below the sector median, signaling potential value. Looking ahead to next year, forecasts suggest revenue could rise to $110.2 billion, with earnings reaching $10.45 per share, bringing the forward P/E down to 14.69.
With interest rate cuts now started and inflation on a downward trajectory, Target Corp (NYSE:TGT) is expected to see more traffic at its stores in the months ahead, especially during the upcoming holiday season.
Carillon Eagle Growth & Income Fund stated the following regarding Target Corporation (NYSE:TGT) in its Q2 2024 investor letter:
“Target Corporation’s (NYSE:TGT) sales continue to feel the consumer softness in discretionary goods. In addition, while margins are recovering, they are not up to expectations. Encouragingly, sales are sequentially increasing and comparable sales are expected to get easier as Target enters the back half of the year.”
7. Lennar (NYSE:LEN)
Number of Hedge Fund Investors: 60
Commenting on Lennar (NYSE:LEN) in a recent program, Jim Cramer said the company is the “biggest and the best” and executive chairman Stuart Miller has “done a remarkable job.”
Jim Cramer said “every number” in the company’s latest earnings was “good.”
He said that the notion that flat gross margin guidance for the next quarter was a good reason to sell the stock is “stupid.”
Cramer said he’d like to “congratulate” the company for performing well despite the tough environment.
Lennar (NYSE:LEN) indeed performed well but lower-than-expected margins in the quarter and weak guidance for the metric impacted the stock prices. However, analysts believe with interest rate cuts and mortgage declines Lennar is positioned well to benefit from a rise in housing demand.
6. Nike Inc (NYSE:NKE)
Number of Hedge Fund Investors: 66
Commenting on Nike Inc (NYSE:NKE) in a latest episode of “Mad Dash” on CNBC, Cramer said:
“Right now, it is just downhill but the people, the people out in Nike, they seem oblivious.”
Nike Inc (NYSE:NKE) has indeed been a loser this year, down about 21% so far. Nike is getting battered in China amid declining sales as consumers cut back on spending due to rising inflation.
However, Nike Inc (NYSE:NKE) bulls believe the company will be able to come out of this crisis following rate cuts and the easing of global economic situation. Nike remains a giant, with about $11 billion in cash, sufficient to cover its $8.9 billion long-term debt. Nike Inc (NYSE:NKE) is also the leader in the footwear market which is expected to grow at a CAGR of 6.86% from $173.89 billion in 2024 to $242.33 billion by 2029. Nike Inc (NYSE:NKE) sales in the market are about 100% higher than Adidas, the second-biggest player in the market.
Another strong reason to own Nike Inc (NYSE:NKE) shares is its dividend, which has grown for two decades now without a break.
Nike Inc (NYSE:NKE) has a forward P/E ratio of about 29, about 18% lower than its five-year average. This makes the stock undervalued for long-term investors with a large risk appetite.
Mar Vista Focus strategy stated the following regarding NIKE, Inc. (NYSE:NKE) in its Q2 2024 investor letter:
“NIKE, Inc.’s (NYSE:NKE) stock declined following management’s revised forecast for fiscal year 2025, projecting negative mid-single-digit revenue growth instead of the previously anticipated positive growth. The company has observed a marked slowdown in lifestyle product sales since April, a trend that persisted into June. Our current projections indicate that both sales and earnings will fall 15-20% below the conservative estimates set by management just a quarter ago. This substantial downward revision in sales and earnings is attributed to insufficient product innovation, wholesale channel shift, and intentional reduction of supply in lifestyle franchises. While the negative adjustments to guidance could potentially act as a clearing event for the stock, the degree of conservatism in the new projections remains uncertain. Nike maintains its position as the global leader in sportswear. However, its revenue growth has been hampered by a lack of innovation, and its recovery is further complicated by deteriorating macroeconomic conditions in the US and China. The company’s renewed focus on innovation and efforts to re-engage with wholesale channels may eventually help restore growth, but we believe increased skepticism regarding management’s ability to execute is justified.”
5. Crowdstrike Holdings Inc (NASDAQ:CRWD)
Number of Hedge Fund Investors: 69
Commenting on Crowdstrike Holdings Inc (NASDAQ:CRWD), Jim Cramer referred to CEO George Kurtz’s comments and said the company has “lost almost no clients” despite the major tech outage incident.
Cramer said another important thing was that Microsoft CEO Satya Nadella joined Kurtz and the companies are now working together.
Cramer was referring to the Fal.Con 2024 event where Kurtz and Nadella talked about the collaboration between the two companies.
“That is very threatening to the rest of the industry, it’s very positive. Crowdstrike Holdings Inc (NASDAQ:CRWD) has bottomed,” Cramer added.
Despite the tech outage incident, the fundamental story of Crowdstrike Holdings Inc (NASDAQ:CRWD) remains unchanged, despite short-term damages. Wedbush Securities estimates that less than 5% of CrowdStrike’s customers might switch providers, potentially impacting revenue by $150 million out of the projected $3 billion in sales for fiscal year 2024. This would lower the company’s forward revenue growth from 30.6% to 25.6%, but even at this adjusted rate, Crowdstrike Holdings Inc (NASDAQ:CRWD) would remain well above the IT sector median.
TimesSquare Capital Management U.S. Focus Growth Strategy stated the following regarding CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its Q2 2024 investor letter:
“Our cybersecurity holdings were also beneficial to the strategy this quarter. That included the 20% gain from CrowdStrike Holdings, Inc. (NASDAQ:CRWD), a cloud-based network security service provider that supports a range of devices, endpoints, and cloud environments. CrowdStrike’s revenues and earnings exceeded expectations, with 33% growth in annual recurring revenue. CrowdStrike continues to see growing momentum in emerging areas such as Cloud Security, Identity, and Security Information & Event Management where it is displacing legacy providers. That led CrowdStrike’s management to increase its guidance for revenues and earnings for the balance of its fiscal year.”
