In this article, we will take a detailed look at Jim Cramer’s Latest Portfolio: Top 9 Stocks to Buy and Sell.
Jim Cramer is exuberant about the Federal Reserve’s aggressive rate cut.
“Believe me, there are few things more friendly than a 50 basis point rate cut,” Cramer said in a recent program.
The CNBC host said that he has reminded his viewers repeatedly that when the Fed is your “enemy” you should stick to recession-proof stocks that can produce consistent earnings despite market slowdowns.
“Once the Fed is done tightening and we start seeing signs of impending rate cuts you need to load up on the cyclicals, the companies that see massive earnings growth when the economy accelerates,” Cramer reminded his viewers about his advice on how to play the interest-rate game.
Jim Cramer has been talking about all sorts of stocks during his latest programs. In this article we picked 9 important stocks he’s bearish/bullish on and analyzed these companies in detail. With each stock we have mentioned its hedge fund sentiment. 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).
9. Gentex Corp (NASDAQ:GNTX)
Number of Hedge Fund Investors: 26
Talking about Gentex Corp (NASDAQ:GNTX), Cramer said the stock will be negatively impacted because it’s related to the auto industry.
“I don’t see a quick turn. We will need several Fed rate cuts before they turn, I am sorry.”
Gentex Corp (NASDAQ:GNTX) makes automatic-dimming rear-view mirrors and camera-based driver assistance systems for cars.
8. Celsius Holdings, Inc. (NASDAQ:CELH)
Number of Hedge Fund Investors: 27
Jim Cramer said in a latest program on CNBC that something is wrong with Celsius Holdings, Inc. (NASDAQ:CELH).
“The stock was at $99, and now it’s at $34 and we have not word from John Fieldy (company CEO) other than everything is great. That’s no longer tolerable for me. I want to know what’s wrong.”
Celsius Holdings, Inc. (NASDAQ:CELH) is down 47% so far this year. The energy drinks company is facing headwinds amid rising U.S. CPI for nonalcoholic beverages, exacerbated by the company’s price hikes in 2021 and 2022. These increases were implemented to address supply chain challenges, but they’ve led to higher prices, contributing to a shift in consumer behavior. More customers are opting for grocery mass online purchasing instead of convenience stores because of high prices.
With a 12-pack of Celsius Holdings, Inc. (NASDAQ:CELH) priced at around $21—nearly three times that of Coca-Cola—it’s not surprising that premium pricing could dampen demand further. The company’s U.S. sales growth may continue to slow, especially when compared to its impressive pre-pandemic 2-year compound annual growth rate (CAGR) of 44.2% and pandemic 4-year CAGR of 104.6%.
On the upside, Celsius Holdings, Inc. (NASDAQ:CELH) posted strong bottom-line growth in Q2 2024, with gross profit margins improving to 52% and adjusted EBITDA margins at 24.9%. However, there’s uncertainty surrounding how sustainable these margins will be as the company plans to ramp up promotional spending and marketing investments in the second half of 2024, which could pressure profit margins in the near term.
Alger Small Cap Growth Fund stated the following regarding Celsius Holdings, Inc. (NASDAQ:CELH) in its Q2 2024 investor letter:
“Celsius Holdings, Inc. (NASDAQ:CELH) engages in the development, marketing, sale, and distribution of functional drinks and liquid supplements. It also offers post-workout functional energy drinks and protein bars. During the quarter, shares detracted from performance after the company reported fiscal first quarter revenues below analyst estimates. The revenue shortfall was attributed to ongoing inventory management challenges with PepsiCo, which decelerated year-over-year revenue growth from over 100% to approximately 37%. Despite the near-term growth slowdown, we believe Celsius remains well positioned to potentially capture market share within the large energy and soft drink industry over the long-term.”
7. Equity Residential (NYSE:EQR)
Number of Hedge Fund Investors: 30
Jim Cramer was asked about Equity Residential (NYSE:EQR) in a latest program. He called the stock a “total winner.”
“That is just an amazing stock.It still got about a 3% yield you can still make money in it.”
Cramer said a shortage of housing and apartment complexes could create a further runaway for this stock, which is already up 20% so far this year.
Equity Residential (NYSE:EQR) owns about 79,738 apartments across major U.S. cities like Boston, New York, and San Francisco. The REIT focuses on high-end tenants in urban areas, primarily managing mid-and high-rise apartments, along with a number of garden-style units.
Bank of America Securities recently downgraded the stock to Neutral from Buy on concerns that a softening U.S. labor market may negatively impact its portfolio. Equity Residential (NYSE:EQR) urban demographic is seen as more vulnerable to potential economic slowdowns.
Equity Residential (EQR) has seen a slowdown in its growth metrics over recent quarters. Same-store rental income increased from $697.8 million in Q2 2023 (a 5.5% year-over-year growth) to $718.2 million in Q2 2024, but the growth rate dropped to 2.9%. Similarly, same-store net operating income (NOI) growth decelerated from 5.6% in Q2 2023 to 3.0% in Q2 2024. Despite this, the REIT provided positive guidance, raising expectations for same-store rental income by 70 basis points and NOI by 145 basis points. Additionally, expense guidance was reduced by 100 basis points, situating expected NOI growth at 3.25%, slightly higher than the latest YoY growth.
Baron Real Estate Fund stated the following regarding Equity Residential (NYSE:EQR) in its Q2 2024 investor letter:
“In the second quarter, the shares of Equity Residential (NYSE:EQR), the largest U.S. multi-family REIT, appreciated due to continued strong operating updates, an improved full-year growth outlook, and faster-than-expected improvement in the company’s West Coast markets. Management has assembled an excellent portfolio of Class A apartment buildings located in high barrier-to-entry coastal markets with favorable long-term demographic trends and muted overall supply growth. Please see the “Top net purchases” for further thoughts on the company.
In the second quarter, we increased the Fund’s REIT exposure to best-in-class multi-family owners/operators Equity Residential and AvalonBay Communities, Inc. Our meetings with each management team supported our view that both companies are led by astute executives that are highly focused on driving value creation for shareholders…” (Click here to read the full text)
6. Moderna Inc (NASDAQ:MRNA)
Number of Hedge Fund Investors: 39
When asked about Moderna Inc (NASDAQ:MRNA) in a latest program, Cramer said:
“Moderna has been a big disappointment.”
Moderna Inc (NASDAQ:MRNA) has been getting tarnished amid downgrades from Wall Street. It was one of the most shorted stocks in August. Investors are looking for growth catalysts for the stock beyond COVID.
The company recently cut its R&D budget by $1.1 billion between 2024 and 2027. The cancellation of five pipeline programs also signaled reduced confidence in its COVID-19 vaccine revenue or the potential of the shelved projects.
Moderna Inc (NASDAQ:MRNA) late-stage pipeline also faces significant challenges. The combined flu-COVID vaccine, expected to be filed for FDA approval soon, is entering a competitive field. Novavax and Sanofi are developing a similar shot, with trials expected to yield results by mid-2025. Moderna’s RSV vaccine, approved for adults 60 and over, also faces competition from GSK’s Arexvy, which holds a first-mover advantage in a key demographic (ages 50-59).
The company’s mRNA vaccines are also expected to face headwinds amid a wider reluctance in the public. A recent survey showed that only 43% of Americans plan to get the updated COVID-19 vaccine this year. Concerns over side effects, such as myocarditis and Guillain-Barré syndrome, linked to mRNA vaccines, continue to affect vaccine uptake.
Moderna Inc (NASDAQ:MRNA) projected 2025 revenue is $2.5 billion to $3.5 billion, giving it a high forward price-to-sales ratio of 10.2 times, well above the industry average of 3.8 times.
5. Nextracker Inc. (NASDAQ:NXT)
Number of Hedge Fund Investors: 39
Jim Cramer was recently asked about First Solar. He instead pitched Nextracker Inc. (NXT).
“I know it’s been a big disappointment for Club members but you got to stick with Shugar (company CEO).”
Earlier this year, Jim Cramer had said the following about NXT:
“Their technology lets you increase your yield from solar panels. The stock is down. It’s a great opportunity.”
Wall Street is also growing bullish on Nextracker Inc. (NASDAQ:NXT). Earlier this year, Mizuho gave a $59 price target on the stock, saying Nextracker Inc. (NASDAQ:NXT) is positioned to benefit from the demand growth of solar power driven by data centers and AI.
Nextracker Inc. (NASDAQ:NXT) stands to benefit from the secular tailwinds in the industry. According to data from the U.S. Energy Information Administration, solar is expected to grow at a CAGR of 26% over the next five years.
4. Viking Holdings Ltd (NYSE:VIK)
Number of Hedge Fund Investors: 41
Experiential travel and cruise company Viking Holdings Ltd (NYSE:VIK) is one of the stocks Jim Cramer is recommending. When a caller asked him about the stock in a latest program, he said:
“This is a really fine company and will do well for multiple years because they have many ships coming in. Buy Viking.”
Viking Holdings Ltd (NYSE:VIK) operates about 85 vessels and offers unique cruise experiences on major rivers, such as in Europe and the Mississippi, alongside global ocean and expedition voyages. Its primary revenue sources are cruise and land (93%) and onboard & other (7%).
VIK’s demand strength stands out within the travel and leisure industry, driven by both capacity expansion and favorable pricing. In the second quarter, the company saw a 9.1% year-over-year revenue growth, supported by a 6.6% increase in net yields (cruise revenue per passenger cruise day) and an occupancy rate of 94.3%, indicating strong demand despite growing capacity.
Relative to its competitors, such as Norwegian Cruise Line Holdings (NCLH), Royal Caribbean (RCL), and Carnival Corporation (CCL), Viking Holdings Ltd (NYSE:VIK) is expected to grow faster, with a projected growth rate of ~14% over the next 24 months. In comparison, RCL is expected to grow at ~11%, NCLH at ~9%, and CCL at ~7%.
All of this justifies the company’s forward EBITDA multiple of 10.6x, compared to 8.9x for its competitors.
3. Pfizer Inc (NYSE:PFE)
Number of Hedge Fund Investors: 84
Jim Cramer in a latest program on CNBC said that he “likes” Pfizer Inc (NYSE:PFE) at the current levels and the company’s 5.6% dividend yield.
Cramer also said he likes Pfizer’s “cancer strategy.”
Pfizer Inc (NYSE:PFE) is down about 3% so far this year as the market is still reluctant about the company’s path forward beyond its COVID revenues. However, the bulls believe there are plenty of growth catalysts for the company.
Its $43 billion acquisition of Seagen will play a key role in its oncology portfolio. Pfizer Inc (NYSE:PFE) potential success with antibody-drug conjugates (ADCs) is also worth watching, as these treatments could boost its oncology division’s performance. In the second quarter, Pfizer’s oncology revenue jumped 27% year-over-year, highlighting solid execution in this growth area.
What about the weight loss industry? Pfizer Inc (NYSE:PFE) is a clear laggard in this area when compared to rockstars like Eli Lilly and Novo Nordisk. However, the company plans to position its product Danuglipron competitively, with a large-scale phase III trial in the works.
Pfizer Inc (NYSE:PFE) is also focusing on cost-cutting efforts, targeting over $4 billion in savings. Additionally, its manufacturing optimization plans could reduce operating expenses by another $1.5 billion by 2027.
PFE’s forward adjusted PEG ratio of 1.16, about 40% below the industry median. Based on the above-mentioned catalysts, the stock could be a promising buy for long-term investors.
Parnassus Value Equity Fund stated the following regarding Pfizer Inc. (NYSE:PFE) in its first quarter 2024 investor letter:
“During the quarter, we added new positions in Pfizer Inc. (NYSE:PFE), NICE and Charter Communications. We purchased Pfizer to capture the potential upside from any turnaround following the COVID-induced boom-bust cycle of the last few years. Pfizer’s stock price sank by more than 40% in 2023 as COVID-19 vaccine revenues rolled off, providing an attractive entry point for us. The company completed its acquisition of Seagen, which should strengthen Pfizer’s pipeline in antibody-drug conjugates (ADC). Pfizer also offers an attractive dividend yield.”
2. Vertiv Holdings Co (NYSE:VRT)
Number of Hedge Fund Investors: 92
Jim Cramer in a latest program agreed with a caller who asked him whether he’d buy more Vertiv Holdings Co (NYSE:VRT) shares on a pullback.
“On a pullback, absolutely. Vertiv is a premier data center stock.”
Cramer said Vertiv is a “winner.”
Vertiv Holdings Co (NYSE:VRT) is a market leader in the data center power and cooling market, which has nowhere to go but up from here since companies are hungry for data center solutions as they begin to deploy AI software.
Vertiv Holdings Co (NYSE:VRT) is forming long-term partnerships with Intel and Nvidia to develop tailored solutions for their products. This is especially notable because AI training requires significantly more electricity and produces more heat than traditional servers, driving demand for specialized systems that Vertiv Holdings Co (NYSE:VRT) provides. The company estimates that the additional demand from AI could boost its top-line growth by up to 4% annually.
By designing products specifically for Nvidia’s GPUs, Vertiv can tap into Nvidia’s growth with minimal effort, as their systems are crucial for optimizing GPU performance. If Nvidia powers data centers with its processors, Vertiv provides the infrastructure that keeps them running efficiently.
Vertiv Holdings Co (NYSE:VRT) revenue has grown on average at 10% in the most recent quarters. The company has a backlog of over $7 billion, more than a year’s worth of current revenue. Vertiv is targeting a 20% operating margin by 2028.
Baron Small Cap Fund stated the following regarding Vertiv Holdings Co (NYSE:VRT) in its Q2 2024 investor letter:
“Vertiv Holdings Co (NYSE:VRT) a leading provider of critical digital infrastructure for data centers, contributed during the quarter. As an industry leader in data center cooling and power management, Vertiv is poised to benefit from AI-driven growth in data center spend. The NVIDIA partner network, strong industry relationships, and broad product portfolio that Vertiv maintains enables its participation in the creation of the technology roadmap for the future of the data center. In addition, Vertiv is investing in its capacity to serve this growing end market more effectively. The company also has an extensive global service network to aid customers as they grow. We believe the company has durable competitive advantages and a flexible balance sheet to benefit from the expected significant capital investment in data centers for years to come. Vertiv reported very strong results for the March quarter, with orders up 60%, which highlighted the strong demand it is seeing for its products. We sold some of our position into strength after the runup from the positive report, but still hold a major position in the Fund as we see considerable upside in the shares over time.”
1. Walt Disney Co (NYSE:DIS)
Number of Hedge Fund Investors: 92
Jim Cramer was recently asked about the amusement resort company Six Flags. He said he does not like the stock and instead recommended Walt Disney Co (NYSE:DIS) in this theme.
“I actually prefer, I am not kidding, I am not joking around, I actually prefer the stock of Disney,” Cramer added.
Walt Disney Co (NYSE:DIS) bulls believe the turnaround plan of CEO Bob Iger would work, it just needs more time. With interest rates now on the decline along with inflation, the company’s theme park business can see growth as consumers begin to increase spending.
Despite the inflation storm that affected Walt Disney Co (NYSE:DIS) Experiences business, the segment has maintained a stable operating margin of 29% over the first nine months of the year, though this dipped to 26% last quarter.
Walt Disney Co (NYSE:DIS) in Q3 beat estimates and raised its outlook, as the performance was driven by a profitable streaming business. CEO Bob Iger’s leadership, combined with a $60 billion investment in parks and cruises, is expected to drive future growth.
Meridian Hedged Equity Fund stated the following regarding The Walt Disney Company (NYSE:DIS) in its Q2 2024 investor letter:
“The Walt Disney Company (NYSE:DIS) operates a diversified entertainment business with theme parks, media networks, and streaming services. We own Disney because we believe its strong brand, valuable IP, and expanding streaming offerings will drive sustainable long-term growth. The company’s stock, however, underperformed in the quarter due to concerns about a slowdown in growth at its theme park division. While park revenue still grew by 10% year-over-year, management’s commentary suggested a moderation in post-pandemic demand and rising costs, leading to a disappointing outlook for park operating income in the second half of the year. This overshadowed the positive news that the company’s streaming segment, driven by strong subscriber growth at Disney+, reached profitability ahead of schedule. We held our position and will continue to monitor the performance of the theme park division.”
While we acknowledge the potential of The Walt Disney Company (NYSE:DIS), 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 DIS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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