In this article, we will take a detailed look at Jim Cramer’s Latest Portfolio: 10 Stocks to Buy and Sell.
Jim Cramer in a latest program discussed last week’s market selloff again, saying the notion the broader meltdown was because of “hard landing” fears is “totally false.” Cramer said that it was all related to the Japanese stock market and Yen, and “nothing more.”
“A bunch of money managers took advantage of how you can borrow against Japanese bonds which had a very low interest rate and then have relatively free money which you can put to work in stocks all around the globe, including here (the US),” Cramer said.
Jim Cramer said that small-cap stocks are “trying to come” back. However, he pointed to an “issue” with the small-cap rally. He said that no one actually bought individual small-cap stocks and instead loaded up on ETFs. Investors, according to Cramer, “walked away” when the broader market wavered.
For this article we watched the latest programs on Cramer recently aired on CNBC and picked 10 stocks he’s talking about. With each company 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. RPM International Inc (NYSE:RPM)
Number of Hedge Fund Investors: 25
When asked about RPM in a latest program, Jim Cramer said it’s a “great company.”
“I want you to own it,” said Cramer.
RPM International Inc (NYSE:RPM) makes specialty chemicals, providing a wide range of products including waterproofing systems, coatings, sealants, and adhesives for industrial, specialty, and consumer markets. RPM International Inc (NYSE:RPM) offerings span roofing and building maintenance to concrete repair and fire protection solutions, catering to diverse construction and manufacturing needs worldwide.
Since 2002, RPM International Inc (NYSE:RPM) has expanded its portfolio to include specialty paints, protective coatings, sealants, and adhesives, serving both industrial and consumer markets. With brands like Carboline and Rust-Oleum, RPM operates in approximately 164 countries and runs 121 manufacturing facilities worldwide. In the 12 months leading to Q1 FY 2024, RPM International Inc (NYSE:RPM) generated $7.3 billion in net sales.
RPM International Inc (NYSE:RPM) recently posted fiscal Q4 results in which revenue fell about 1% year over year. The company saw tremendous growth in the near past but analysts believe with revenue growth slowing and forward P/E of about 21, the stock is fairly valued.
JPMorgan last month downgraded the stock amid valuation concerns.
J.P. Morgan analyst Jeffrey Zekauskas highlighted that volume trends for DIY home improvement products, sold through major retailers, have been negative in the first half of 2024. He expressed skepticism about a rebound in demand in the second half, based on insights from paint and coatings companies as well as big-box retailers.
JPMorgan at the time said the stock was trading 15 times earnings before interest, taxes, depreciation and amortization for calendar-year 2024 and 14 times for calendar-year 2025.
“We think these multiples represent fair value for the shares,” JPMorgan said.
TimesSquare Capital U.S. Mid Cap Growth Strategy stated the following regarding RPM International Inc. (NYSE:RPM) in its fourth quarter 2023 investor letter:
“Within Materials, we seek well positioned companies that are less susceptible to swings in commodity prices. RPM International Inc. (NYSE:RPM), a producer of coatings, sealants, and building materials, gained 18%. Fiscal first quarter revenues and earnings topped consensus projections. Growth was led by business lines touching building maintenance, infrastructure, and plant spending while sales to Original Equipment Manufacturers were weaker.”
9. ONEOK Inc (NYSE:OKE)
Number of Hedge Fund Investors: 31
Jim Cramer hit the buy, buy, buy button on OKE when he was asked about the stock in a latest program. He said the company is “terrific” and “sensational.” Cramer also likes the stock’s 4.7% dividend yield.
ONEOK Inc (NYSE:OKE) is one of the biggest midstream companies in the US, managing a vast 50,000-mile network of pipelines that transport natural gas liquids (NGLs), natural gas, refined products, and crude oil. The company has strategic access to approximately half of America’s refineries, underscoring its significant industry footprint.
ONEOK Inc (NYSE:OKE) recently posted strong Q2 results. Here is what the company said about guidance during the latest earnings call:
We affirmed our 2024 financial guidance after increasing it with our first quarter earnings announcement. That increased guidance range included an expected adjusted EBITDA midpoint of $6.175 billion, with the high end at $6.325 billion. We continue to expect to meet or exceed our midpoint of $175 million in cost and commercial synergies in 2024 and expect additional annual synergies to meet or exceed $125 million in 2025. As of June 30, we had no borrowings outstanding under our $2.5 billion credit agreement. During the quarter, we extended the maturity of our revolving credit facility to June of 2028. In addition, our run rate net debt-to-EBITDA ratio was 3.36x at the end of the second quarter, in line with our long-term leverage target of 3.5x.
The management also briefly talked about data center projects:
We had 15 projects, potential projects across our footprint. Of those, there were 3 that specifically stated AI. Since then, we’ve — our number is up about to 17 on the potential power plants, and of which 5 are AI demand specifically. Approximately across our footprint, these 5 are right in the neighborhood of a Bcf per day. So again, early stages, but more to come.
ONEOK Inc (NYSE:OKE) is actively working on growth projects, including the reactivation of 3 Bcf of storage in Texas and enhancing injection capabilities in Oklahoma. These projects are on track, with the Texas storage expected to be fully operational by Q3 this year and the Oklahoma expansion by Q2 next year.
It aims for a 75-85% payout of operating cash flow after capital expenditures, with a target of 3-4% annual dividend growth. ONEOK Inc (NYSE:OKE) currently offers a dividend yield of 4.7%, with a five-year compound annual growth rate (CAGR) of 2.7% and a payout ratio of 90%. Notably, ONEOK Inc (NYSE:OKE) maintained its dividend even during the 2015 oil price crash.
8. On Holding AG (NYSE:ONON)
Number of Hedge Fund Investors: 34
Jim Cramer has long been a bull on ONON. Recently, a caller asked him whether he should buy or hold the stock. Cramer said, “you should add it.”
Performance footwear company On Holding AG (NYSE:ONON) is operating in a highly competitive industry, but it also has high barriers to entry. Analysts are paying attention to the company’s ‘Lightning and Rain’ strategy to elevate brand recognition. The approach, highlighted during the company’s Q1 earnings call, focuses on winning races at the elite level and gaining market share among everyday runners. Here is what On management said during the earnings call about this strategy:
The lightning and rain strategy, winning on the racecourse with next level innovation, and gaining market share with everyday runners, continues to deliver for the On brand. Three weeks ago, Hellen Obiri won the marathon in Boston for the second time, the first woman in two decades to go back to back. She was running in On head to toe, including a groundbreaking new footwear technology, which On will reveal in Paris this summer. We would like congratulate Helen and also thank our innovation team for the incredible work in developing the fastest raised products. The reign element of this strategy means converting the credibility of our innovations and athlete successes to market share gains, with everyday runners enjoying their local running routes.
Read the full earnings call transcript here.
More and more athletes are using On shoes, including Obiri, tennis stars Ben Shelton and Iga Swiatek, and track athletes Yared Nuguse and Olli Hoare.
On Holding AG (NYSE:ONON) has growth revenue at a 58% CAGR and operating income at a 124% CAGR since 2019. The company turned profitable in 2022 and has since expanded its margins. Free cash flow has improved dramatically, and On Holding AG (NYSE:ONON) remains debt-free.
Margin expansion is central to On’s strategy, with revenues growing faster than SG&A expenses, contributing to operating leverage. The company is also ramping up marketing efforts, with marketing expenses as a percentage of sales at 10.9% in 2023, slightly up from 10.7% in 2022. These investments include digital acquisition, sponsorships with elite athletes, and collaborations with artists, all aimed at driving brand awareness.
The stock is already up 50% so far this year. Wall Street expects the company’s revenue to grow about 26% while earnings growth is estimated at 50% for the next five years annually. On Holding AG (NYSE:ONON) is spending more to grow and it seems the stock still has some growth runway before it loses steam.
Artisan Small Cap Fund stated the following regarding On Holding AG (NYSE:ONON) in its first quarter 2024 investor letter:
“We initiated new GardenSM positions in On Holding AG (NYSE:ONON) during the quarter. On is an emerging global athletic sports brand focusing on performance footwear. Performance running footwear is one of the most challenging categories to break into, requiring a high degree of technical knowledge, significant investment spending and marketing prowess, each of which On has acheived over the years. The company’s foundation in performance footwear provides a high barrier to entry and a strong and credible foundation for the brand to continue growing. We believe On will generate attractive growth as it scales across product categories, channels and geographies within the $300 billion global sportswear market.”
7. Dollar Tree Inc (NASDAQ:DLTR)
Number of Hedge Fund Investors: 39
Jim Cramer is bearish on DLTR. He said in a latest program that the company’s business model is not working and customers would rather go to Walmart or Costco.
Dollar Tree Inc (NASDAQ:DLTR) shares have lost about 33% in value so far this year. Inflation is high, so isn’t the company supposed to benefit as consumers search for affordable items? Analysts believe Americans are avoiding spending on items that are sold on stores like Dollar Tree Inc (NASDAQ:DLTR) because they are prioritizing essential items like groceries. Management missteps are also part of the reason why Dollar Tree stores are struggling. According to Consumer Affairs, customers have complained about staffing shortages at several Dollar Tree stores.
Dollar Tree Inc (NASDAQ:DLTR) is also getting hammered amid competition from low-cost Chinese brands. In June the company said it’s planning to sell Family Dollar business.
Citigroup’s analyst Paul Lejuez downgraded Dollar Tree Inc (NASDAQ:DLTR) from Buy to Neutral on this news, citing increased uncertainty and a more balanced risk/reward scenario.
Lejuez’s earlier bullish stance was based on the appointment of CEO Rick Dreiling, a “proven operator,” and the introduction of multi-price points at Dollar Tree Inc (NASDAQ:DLTR) to broaden its customer base and boost sales. However, the rollout of higher price points has fallen short, with 25% of the new multi-price stores underperforming expectations.
Lejuez also noted that the decision to consider strategic alternatives for Family Dollar suggests deeper structural issues than previously thought.
Piper Sandler recently downgraded the stock from Overweight to Neutral. The downgrade reflects concerns about the retailer’s vulnerabilities, regardless of the outcome of the upcoming Presidential election. A Trump victory could reintroduce tariff risks that previously impacted about 10% of Dollar Tree Inc (NASDAQ:DLTR) merchandise, including key items like household products and electronics. While the threat of a 60% tariff is deemed serious, such rates are unlikely. A Biden victory, on the other hand, could lead to new overtime regulations.
Madison Investors Fund stated the following regarding Dollar Tree, Inc. (NASDAQ:DLTR) in its Q2 2024 investor letter:
“Dollar Tree, Inc. (NASDAQ:DLTR) underperformed following a plethora of concerns: weakness surrounding the low-end consumer, pricing actions by peers, and disappointing sales at the core Dollar Tree banner. In addition, the significant news that management has placed the struggling Family Dollar banner under strategic review was received skeptically by investors. Despite these concerns, we are encouraged by the long-term prospects of the multi-price initiatives at the Dollar Tree banner and are entirely supportive of management’s effort to enhance value by evaluating alternatives for Family Dollar. We also see a comfortable margin of safety in the shares at the current price.”
6. DuPont de Nemours Inc (NYSE:DD)
Number of Hedge Fund Investors: 42
Cramer was asked about DuPont during a latest program on CNBC. Here is what he said:
“I heavily suggest you buy much more DuPont.”
Cramer said he believes the stock would reach $100.
“I want you to buy, buy, buy DD,” Cramer emphasized.
Last month DuPont de Nemours Inc (NYSE:DD) posted strong quarterly results and raised guidance. The company saw a 20% organic sales growth in its Semiconductor Technologies segment, fueled by strong volume growth in the electronics industry and increased demand for AI-driven technologies and OLED materials.
During the third quarter DuPont de Nemours Inc (NYSE:DD) expects its organic revenue growth to be driven by the Electronics and Industrial (E&I) segment, with the Water and Protection (W&P) segment expected to contribute in the fourth quarter.
DuPont de Nemours Inc (NYSE:DD) could be an interesting play for AI-focused investors. Why?
DuPont’s electronics segment accounts for about a third of its sales. DuPont de Nemours Inc (NYSE:DD) is well-positioned to benefit from the growing semiconductor market, driven by AI adoption, machine learning, cloud expansion, and the proliferation of IoT devices.
DuPont de Nemours Inc (NYSE:DD) raised its full-year net sales forecast to $12.40-$12.50 billion, up from the previous $12.10-$12.40 billion range, and upped its earnings guidance to $3.70-$3.80 per share, compared to the prior $3.45-$3.75 range.
The stock is trading at about 22 times its expected 2024 earnings. Analysts expect the company to post $4.25 and $4.83 in adjusted EPS in 2025 and 2026, respectively. This means the stock has a forward PE of 18.9 on its expected 2025 earnings, and a 16.6 PE on its 2026 adjusted EPS forecast.
5. Msci Inc (NYSE:MSCI)
Number of Hedge Fund Investors: 53
Jim Cramer was asked about MSCI in a latest program. He said he’d want to “own the stock” of MSCI.
“I like the fact that the company is the only single source of how we should value different industries around the world,” Cramer said.
Msci Inc (NYSE:MSCI) provides equity, fixed income, real estate indices, multi-asset portfolio analysis tools, ESG and climate products.
Msci Inc (NYSE:MSCI) is one of the biggest beneficiaries of the broader shift to index funds and the rise of passive investing over the past several years. The company has seen its revenue grow 2.5 times and EPS surge 6.8 times since 2014. Its index segment, which contributes 56% of total revenue and 80% of operating profits, is what makes this stock special. With over $15 trillion in benchmarked assets, Msci Inc (NYSE:MSCI) growth is closely tied to asset-based fees, particularly from ETFs. As markets perform well and institutional investors seek established benchmarks, MSCI’s stable, high-retention client base and pricing power offer resilience.
Msci Inc (NYSE:MSCI) predictable earnings and high retention rate—95%—are bolstered by a subscription-based model generating nearly 75% of sales.
MSCI is also a dividend payer, with a dividend growth rate of over 780% over the past decade.
Analysts expect mid-double-digit EPS growth through 2026, with projections of $14.66 for 2024, $16.69 for 2025, and $18.89 for 2026. Given Msci Inc (NYSE:MSCI) stable revenue streams and profit margins, the company is well-positioned to deliver strong returns.
Polen Focus Growth Strategy stated the following regarding MSCI Inc. (NYSE:MSCI) in its Q2 2024 investor letter:
“We re-initiated a position in MSCI Inc. (NYSE:MSCI) after owning it from 2019 to 2022. When we sold the position in April 2022, we noted that the company was an excellent compounder and would likely continue to compound earnings at a high-teens rate over the next five years. We also noted that we’d be happy to own MSCI again at a good price.
More than two years later, we’re buying back a position at a lower price despite 30% higher earnings. The stock sold off recently after MSCI reported a decrease in net new subscription sales during the first quarter. New subscription sales were up modestly compared to the prior year, but there was a bolus of cancellations due to “business events,” most notably UBS acquiring Credit Suisse and adjusting their subscriptions. While net new subscription sales might be soft near-term, retention rates remain high for this highly recurring and profitable business. This short-term softness does not change our view on the business’s competitive advantages or long-term growth profile.
MSCI has compelling competitive advantages, leadership, and secular growth trends, including the continued move of assets toward passive, international, factor-based, and ESG-related investments. We also like the company’s longer-term strategy of being the index provider for private market investments.”
