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.”
4. Western Digital Corp (NASDAQ:WDC)
Number of Hedge Fund Investors: 80
Jim Cramer talked about a CNBC research piece that mentioned a list of stocks that have historically outperformed after the Fed’s rate cuts. The research said Western Digital Corp (NASDAQ:WDC) is up on average 20% after the first rate cut. However, Cramer thinks the stock is a value trap.
“This maker of hard drives and solid state drives, basically storage for your phones or your PC, has historically been, sadly, a huge value trap.”
Cramer instead recommended Micron as a better buy.
Western Digital Corp (NASDAQ:WDC) is one of the top semiconductor picks of Cantor Fitzgerald. The company recently reported quarterly results. Cloud segment revenue jumped 20% on a sequential basis. Overall, the company is seeing a rise in profits amid higher pricing and a shift to premium high-performance products. The cloud business, particularly in high-capacity HDDs for data centers, remains strong.
What are AI-related growth catalysts for Western Digital? How can an SSD and storage devices company be called an AI stock?
The rise of artificial intelligence and its data demands positively impact both HDD and flash demand. Generative AI apps and machine learning require substantial data storage, a tailwind for Western Digital. The company is well-positioned to capitalize on this trend, which is still in its early stages.
During the fiscal Q3 earnings call the company’s management talked about AI-related business trends:
“I would say about the AI demand as it’s coming into focus. I don’t think it’s so much in the results just yet, but we’re seeing where it’s going to impact both businesses. And clearly, one of them you just outlined, which is we’re seeing enterprise SSD demand return, we saw some increase in the last quarter. We expect some increase in this quarter. But really, as we look to the second half, we have customers coming to us wanting the kind of SSDs we built and qualified before the downturn. They just want them in much bigger capacity points, 30 and 60 terabyte capacity points. So it’s the same product just taking it and increasing capacity and going through a qualification on that so we’re in that process with customers.
We also introduced a new SSD that’s more compute focused, which is PCIe Gen 5 product based on BiCS 6, very high performance that plays a little bit different role in the AI training stack and we’re getting very good feedback on that product. It’s being qualified by our starting qualification, we samples. We’re kind of getting rid of the qualification of the hyperscaler and we’re seeing good demand in the enterprise market as well. So we feel like the portfolio set up well as we go into the second half, and we’re seeing a lot of demand show up for people that are very building large amount of infrastructure for model training.”
Parnassus Mid Cap Fund stated the following regarding Western Digital Corporation (NASDAQ:WDC) in its Q2 2024 investor letter:
“We re-initiated a position in Western Digital Corporation (NASDAQ:WDC), a manufacturer of memory semiconductor chips and hard disk drives, as we believe earnings expectations are far too low. Semiconductors have been another of our most-alpha-generative industries, thanks to the industry’s secular tailwinds and our in-house expertise. Western Digital stands to benefit from the rapid growth of memory-hungry AI applications. The valuation for Western Digital was low relative to its peers, giving us a way to participate in AI at a reasonable valuation.”
3. Lam Research Corporation (NASDAQ:LRCX)
Number of Hedge Fund Investors: 84
Lam Research Corporation (NASDAQ:LRCX) is one of the stocks that have historically outperformed after the Fed begins to cut rates, according to CNBC research quoted by Jim Cramer. Cramer said the stock has been “suppressed” amid a lack of orders from China and Intel slowing its manufacturing in Europe to preserve its balance sheet.
“If not for those issues I think it’d be a great buy right now but given that the industry has got problems I’d say let it come in even more but Lam Research is the best in the group.”
Lam Research Corporation (NASDAQ:LRCX) is one of the largest providers of etching equipment for the semiconductor industry. Etching refers to any technology that will selectively remove material from a thin film on a substrate.
China-related concerns have weighed on the stock but the bulls believe that’s an overreaction and the stock has secular growth catalysts, especially due to AI.
As the third-largest semiconductor equipment supplier globally, Lam dominates the etching process. Over the past decade, Lam’s market share has averaged between 45% and 55%. The semiconductor equipment market has consolidated among a few major players, creating an oligopoly. Similar to how ASML dominates lithography, AMAT and Tokyo Electron control deposition, and KLAC leads in process control, Lam benefits from high switching costs, large R&D investments, and experience-driven improvements. These factors contribute to its strong EBIT margins and return on capital.
Lam’s largest customers are memory manufacturers, who have increased their use of Memory Wafer Fabrication Equipment (WFE). From 2010 to 2023, memory WFE consumption accounted for 64% of total WFE, up from 46% during 2001-2009. Additionally, as semiconductor designs have evolved from 2D to 3D, more etching steps are required in the manufacturing process, further driving demand for Lam’s equipment.
Artisan Select Equity Fund stated the following regarding Lam Research Corporation (NASDAQ:LRCX) in its Q2 2024 investor letter:
“The top contributors to performance for the quarter were Alphabet, Lam Research Corporation (NASDAQ:LRCX) and Elevance. Lam Research shares rose 10% during the quarter and are up 67% over the past year, primarily due to optimism around the pending investment cycle in semiconductor capital expenditures. Lam is one of the largest equipment manufacturers used to make semiconductor chips. This equipment, commonly referred to as WFE (wafer fabrication equipment), is expected to experience significant growth due to a combination of a cyclical rebound in memory chips and growing demand for new AI-related chips. Lam’s product portfolio is particularly well positioned to benefit from both trends and should grow even faster than the overall market. Its shares now trade at ~30X prior peak earnings, which suggests this dynamic is well understood by the market and is mostly priced in.”
2. UnitedHealth Group Inc (NYSE:UNH)
Number of Hedge Fund Investors: 114
Cramer said in a recent program that UnitedHealth Group Inc (NYSE:UNH) has surprisingly been an outperformer on Fed rate cuts.
“But I wouldn’t recommend buying it right here unless the Fed is desperately cutting rates because the economy is falling apart – then you buy UnitedHealth Group Inc (NYSE:UNH). I don’t see that happening.”
UnitedHealth Group Inc (NYSE:UNH) is one of the biggest managed healthcare players globally, with segments like UnitedHealthcare, OptumRx, OptumInsight, and OptumHealth. Analysts believe UNH has strong growth catalysts for 2025 because it may be able to raise prices. BofA expects the company’s EPS to approach $28 this year, with steady growth in the low double digits through 2026. Revenue growth is expected by Wall Street in the range of 7% to 8% annually. While dividends are forecasted to rise by more than 10% each year through 2026, the yield may remain under 2%, and its trailing 12-month free cash flow yield is modest at around 1%. Based on these factors, UnitedHealth Group Inc (NYSE:UNH) forward P/E of 20 looks attractive.
Invesco Growth and Income Fund stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its Q2 2024 investor letter:
“UnitedHealth Group Incorporated (NYSE:UNH): Like many managed care providers, United Health has come under pressure from rising medical costs and higher-than-expected utilization. The stock is currently undervalued based on our analysis. We view the company as a high-quality compounder with secular growth opportunities in the managed care segment. The US Presidential election may cause additional near-term uncertainty, but we believe United Health will be able to rebound once pricing and utilization issues normalize.”
1. Apple Inc (NASDAQ:AAPL)
Number of Hedge Fund Investors: 184
Jim Cramer recently talked to T-Mobile CEO Mike Sievert and came out very hopeful on Apple Inc (NASDAQ:AAPL) new iPhone sales. Talking about the over sentiment after his interview, Cramer said:
“Do you think he doesn’t know more about Apple Inc (NASDAQ:AAPL) and sales than these three stooges who said Apple has already time to go, sell it?” Cramer said.
Sievert told Cramer that the “first week was better than last year.”
Cramer said Apple Inc (NASDAQ:AAPL) is one of his top picks “despite endless sources trying to shake you out of this.”
Shipments for Apple Inc (NASDAQ:AAPL) latest iPhone 16 appear to be lower than last year, according to data from UBS Evidence Lab. The lab tracks iPhone availability across 30 regions, and UBS analyst David Vogt noted that delivery wait times for the iPhone 16 Pro Max models are about two weeks shorter than last year in major markets like the U.S., China, and Europe.
“Wait times for the iPhone 16 lineup have been uninspiring since preorders began last Friday,” said UBS analyst David Vogt, in an investor note. “On average, delivery wait times for the Pro Max models are shorter by roughly 2 weeks across the US, China, Germany, Great Britain, France and Japan.”
In the U.S., wait times are 26 days, down from 40 days last year, while in China, they’re just 18 days compared to 36. Despite the upcoming Apple Inc (NASDAQ:AAPL) Intelligence features, initial pre-order sales for the iPhone 16 series are estimated at 37 million units, down 12.7% year-over-year.
Almost every bullish case on Apple Inc (NASDAQ:AAPL) is built around this assumption: millions of people would rush to upgrade their iPhone because of AI features.
However, Apple Inc (NASDAQ:AAPL) has been seeing a long-term decline in mobile carrier upgrade rates, especially postpaid, for several years. This suggests that people are holding onto their devices longer, likely due to economic factors, satisfaction with current technology, or a lack of exciting new features in recent models. This trend isn’t great for Apple Inc (NASDAQ:AAPL). Can Apple Intelligence break this trend? We’ll find out soon.
However, the assumption that we will see a huge upgrade cycle of iPhone just because of AI is big and comes with a lot of risks. Apple Inc (NASDAQ:AAPL) trades at a forward PE multiple of around 35x, well above its 5-year average of nearly 27x. Its expected EPS forward long-term growth rate of 10.39% does not justify its valuation, especially with the iPhone upgrade cycle assumption. Adjusting for this growth results in a forward PEG ratio of 3.33, significantly higher than its 5-year average of 2.38.
Baron Technology Fund stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q2 2024 investor letter:
“The Fund’s chief relative detractor was Apple Inc. (NASDAQ:AAPL), even though it was a meaningful contributor to absolute performance, as we added to our Apple position significantly during the period. We bought Apple well, but in 20/20 hindsight we didn’t buy enough. Because Apple has an oversized weight in the Benchmark (its average weight was 15.7% for the period), when Apple’s stock outperforms (it appreciated 23.0%), it has generally been a headwind to relative performance. Our Apple underweight accounted for 33% of our relative underperformance for the period.
This quarter we increased the size of our position in Apple Inc., a leading technology company known for its innovative consumer electronics products like the iPhone, MacBook, iPad, and Apple Watch. Apple is a leader across its categories and geographies, with a growing installed base that now exceeds 2 billion devices globally. The company’s attached services – including the App Store, iCloud, Apple TV+, Apple Music, and Apple Pay – provide a higher margin, recurring revenue stream that both enhances the value proposition for its hardware products and improves the financial profile. Apple now has well over 1 billion subscribers paying for these services, more than double the number it had just 4 years ago. The increasing services mix has led to healthy operating margin improvement, providing more free cash flow for Apple to reinvest in the business and to distribute to shareholders. Throughout its 48-year history, Apple has successfully navigated and capitalized on major technological shifts, from PCs to mobile to cloud computing. We believe the company’s leading brand and device ecosystem position it to do equally well in the AI age, and this was the driver of our decision to re-invest. “Apple Intelligence” – the AI strategy unveiled at Apple’s recent Worldwide Developer Conference – leverages on-device AI and integrations with tools like ChatGPT to enhance user experiences across its ecosystem. The AI suite enables users to create new images, summarize and generate text, and use Siri to perform actions across their mobile applications, all while maintaining user privacy and security. We think Apple Intelligence can drive accelerated product upgrade cycles and higher demand for Apple services. The combination of growth re-acceleration, increasing services contribution, and thoughtful capital allocation should continue driving long-term shareholder value.”
While we acknowledge the potential of Apple Inc. (NASDAQ:AAPL), our conviction lies in the belief that under the radar 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 AAPL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These 10 Stocks in June.
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