In this article, we will take a detailed look at Jim Cramer’s Latest Lightning Round: Top 10 Stocks.
Jim Cramer in a recent program on CNBC recommended investors to avoid worrying when others are anxious or get too excited about something when others are also doing the same. Cramer said by the time an idea is common among investors, its price already reflects its potential.
“Stocks don’t quite travel at the speed of thought but they come pretty close. So the moment a preponderance of hedge fund and mutual fund managers decide that the economy is slowing, speeding up, or flatlining, stocks start trading like that’s already the case. Usually, it takes some time to build that kind of consensus, which is why you rarely see these moves happening instantaneously. But once the big institutional portfolio managers are on the same page about something, you can be pretty darn confident that it’s baked into the averages. This is some basic economics 101 stuff.”
If every piece of news is priced in, does that mean it’s meaningless to invest in stocks and you are better off putting your money in broader market funds? Cramer calls this idea “bogus” and says the market is pretty irrational at times and stocks are incorrectly priced, giving investors an opportunity.
“The simple truth is that markets are not perfectly efficient. In fact, frankly, they’re often irrational. They ignore things, make mistakes, misvalue information every day. And that’s a major reason why anyone can make money picking individual stocks. These anomalies are everywhere, and they can be great for your portfolio,” Cramer added.
READ ALSO 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In
For this article, we watched the latest programs of Jim Cramer and picked 10 stocks he is talking about 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. Ralph Lauren Corp (NYSE:RL)
Number of Hedge Fund Investors: 30
Jim Cramer was recently asked about Levi Strauss. He said the stock is “intriguing” but Ralph Lauren Corp (NYSE:RL) is better.
“People magazine says they make the best jean jackets. I didn’t know anyone else made jean jackets. I think the product is terrific. The stock itself, with a 3% yield and 13 times earnings, is intriguing, but Ralph Lauren Corp (NYSE:RL) is better—RL.”
For fiscal 2025, Ralph Lauren’s revenue is expected to keep growing, though at a slower pace. RL anticipates revenue growth of 2-3% at constant currency (CC), a slight dip from the 3% growth seen in FY24. Despite ongoing weakness in its largest market, North America, which accounts for 40% of its revenue, RL is managing to grow. In Q1 FY25, North America shrank by 3.7% YoY. Reported revenue growth remained positive thanks to Europe, where revenue rose by 6.3% YoY.
9. Robinhood Markets Inc (NASDAQ:HOOD)
Number of Hedge Fund Investors: 38
When asked about Robinhood Markets Inc (NASDAQ:HOOD) earlier in December, Cramer said he’d stay away from the stock for now until it pulls back.
“I call this what I call an up stock. Alright, everyone’s decided that this is the fintech one to buy. They’ve come on, they’ve been highly promotional. It did an island reversal today, which I typically don’t like. I think it’s headed to 35. We can revisit it there.”
8. PepsiCo Inc (NASDAQ:PEP)
Number of Hedge Fund Investors: 58
Jim Cramer in a latest program talked about PepsiCo Inc (NASDAQ:PEP) and warned investors about the potential headwinds for the company stemming from weight loss drugs.
“Look, it’s not expensive, yields three and a half—not a bad level to start a position. But understand you’re up against GLP-1s, or at least the elusive story of what GLP-1s can do to a company that owns Frito-Lay.”
Artisan Global Equity Fund stated the following regarding PepsiCo, Inc. (NASDAQ:PEP) in its Q1 2024 investor letter:
“In the demographics/consumer trends theme, slowing sales volumes led us to focus more on services versus goods. As an example, we sold our position in food and beverage leader PepsiCo, Inc. (NASDAQ:PEP) given slowing growth in its underperforming core beverage business, one which generates about 60% of revenues. Adding to the uncertainty of growth prospects beverages, PepsiCo was forced by local lawmakers and industry wholesalers to shift to a new distribution model during the rollout of Hard Mtn Dew, a new line of drinks that combines Mountain Dew with malt liquor. We also exited our position in Wal-Mart de Mexico as the company regroups after Hurricane Otis devastated parts of Mexico’s west coast last fall. The damages will likely affect earnings over the medium term. We also sold consumer food and beverage giant Nestle due to slowing sales volume growth. Food inflation over the last two years has increased consumer price sensitivity, putting pressure on many in the industry. In contrast to these goods providers, we bought shares of TUI, an online travel agency that provides custom travel experiences via dynamically priced services such as airfare, lodging and local activities on one platform. We believe the addition of Ryanair to the platform, Europe’s largest airline, will strengthen TUI’s service offering at a time when travel spending is predicted to remain elevated at least through the summer.”
7. Dell Technologies Inc (NYSE:DELL)
Number of Hedge Fund Investors: 60
Jim Cramer was recently asked about his thoughts on Dell Technologies Inc (NYSE:DELL). Here is what he said:
“Dell Technologies Inc (NYSE:DELL) did not have a good quarter. It really was a disappointing quarter. I agree with people, even though I think the world of Michael Dell Technologies Inc (NYSE:DELL). However, I think Dell’s second half will be much better. I do not think much of its first half. If you have the patience to own the stock here, I don’t think there’s a lot of downside, and I think there’s a lot of upside. However, we own other stocks in the portfolio that I think are better, even at this price. Do you know that I actually like Nvidia at 134 more than I like Dell? Just saying.”
In the most recently reported quarter, Dell’s Infrastructure Solutions Group (ISG) posted an impressive 34% year-over-year growth, reaching $11.4 billion in revenue. The server business rose a whopping 58% increase YoY to $7.4 billion.
Dell Tech Inc (NYSE:DELL) experienced a shift in AI server demand toward the next-generation Blackwell architecture. Dell Tech Inc (NYSE:DELL)’s management highlighted that there was a dramatic shift in orders toward Nvidia’s (NVDA) Blackwell-based systems during Q3, which impacted short-term shipments as these products ramp up production. This shift shows Dell Tech Inc (NYSE:DELL)’s competitive position, as customers are willing to wait for the latest tech solutions. Dell secured $3.6 billion in AI server orders this quarter, an 11% increase from the previous quarter. Dell Tech Inc (NYSE:DELL) also signed over 2,000 enterprise customers for their AI solutions.
Carillon Scout Mid Cap Fund stated the following regarding Dell Technologies Inc. (NYSE:DELL) in its Q2 2024 investor letter:
“Dell Technologies Inc. (NYSE:DELL) was a top contributor despite reporting disappointing first-quarter earnings results, because investors looked through the near-term disappointment and expected strong growth from AI-related servers and personal computers. We expect Dell to participate in the growth of artificial intelligence hardware, especially as enterprises invest more aggressively. We like the company’s depth and breadth of products and services, as well as its focus on keeping costs low.”
6. T-Mobile Us Inc (NASDAQ:TMUS)
Number of Hedge Fund Investors: 66
A questioner recently asked Jim Cramer about AT&T. Cramer said he prefers T-Mobile Us Inc (NASDAQ:TMUS).
“I don’t want to own AT&T. Your description of what’s going to happen is very true. AT&T is reforming into a better company. Why do I want to own it? Because if I do want to own anything in that space, I want to buy growth. If I want to buy growth, that means I want to buy T-Mobile Us Inc (NASDAQ:TMUS). Mike Sievert is doing a terrific job. The stock has been incredible, it’s been a horse, and they’ve got a great relationship with Apple. I’d rather be in that and forgo the dividend, which just can’t be nearly as important as the capital gain stream that you’ll get from being with T-Mobile Us Inc (NASDAQ:TMUS).”
With a forward P/E ratio of about 20, T-Mobile is attractively valued. By 2028, T-Mobile anticipates adding another 12 million customers. Through partnerships with firms like Metronet and Lumos, T-Mobile plans to extend fiber coverage to 12-15 million more homes, helping to capture additional customers. T-Mobile expects its AI-driven customer service solutions to reduce inbound calls by about 75%, enhancing the overall customer experience.
5. Crowdstrike Holdings Inc (NASDAQ:CRWD)
Number of Hedge Fund Investors: 74
Jim Cramer was recently asked about Palo Alto Networks. He instead recommended Crowdstrike Holdings Inc (NASDAQ:CRWD) as a better buy.
” Crowdstrike Holdings Inc (NASDAQ:CRWD) fell precipitously, almost 10% over a week, with nothing going on whatsoever. Therefore, that was a disparity with the fundamentals, which I think are excellent. The one to buy right now, at this moment, is Crowdstrike Holdings Inc (NASDAQ:CRWD), as it’s starting to bounce back. That’s the one now playing offense after we had George Kurtz, the CEO, visit 130 companies in 100 days as part of what you’d call the apology tour for what occurred in the third week of July. I really like that one better now.”
Fidelity Growth Strategies Fund stated the following regarding CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its Q3 2024 investor letter:
“A non-benchmark stake in CrowdStrike Holdings, Inc. (NASDAQ:CRWD) (-40%) was the biggest detractor among individual stocks. The shares of this cybersecurity platform provider fell precipitously in July, after a glitch in a CrowdStrike software update led to a global outage for many of its customers that, among other impacts, caused the mass cancellation of flights around the world. After bottoming out in early August, the stock made a partial rebound by quarter end, but we exited the fund’s holding during the summer.”
