In this article, we will take a detailed look at the Jim Cramer’s Latest Stock Portfolio: Top 10 Recommendations.
Jim Cramer in a latest program talked about the concept of “suitability” of stocks in investing, which emphasizes the importance of picking individual stocks based on your personal context, circumstances and life goals instead of short-term market movements. Cramer recalled his days at the Harvard Law School and how he used to run to the library to read research reports on companies to dig out information on quality stocks on a week-to-week basis. When Cramer joined Goldman Sachs, an “executive” at the firm introduced him to the concept of suitability, advising him never to recommend stocks to people without knowing what they want out of investing. According to Cramer, that “best semiconductor stock” might not be good for all individuals and therefore it’s necessary to know the “tolerance” and risk appetite of investors.
Answering a question during the program, Cramer said technical analysis, including paying attention to RSI values, is “incredibly” important to him and he does not like to buy stocks if “their chart is bad.”
For this program we watched several latest programs of Jim Cramer and picked 10 stocks he talked about recently. These include stocks he’s bullish on as well as the ones he recommends selling. We have analyzed each stock in detail to see its fundamentals and know what the Wall Street believes about it. We have also mentioned hedge fund sentiment with each company. 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. Cassava Sciences Inc (NASDAQ:SAVA)
Number of Hedge Fund Investors: 6
Jim Cramer was recently asked about neurodegenerative diseases treatment company Cassava Sciences Inc (NASDAQ:SAVA) during a program on CNBC. Here is what he said:
“If they can have something big, that stock triples. If they don’t I think it drifts down. I like that risk-reward but understand it’s speculative.”
Cassava Sciences Inc (NASDAQ:SAVA) is in the news after a Maryland grand jury indicted a former paid consultant and researcher of the company on fraud charges for falsifying data related to Cassava’s Alzheimer’s drug, simufilam. The stock plunged about 40% on the news. Cassava Sciences Inc (NASDAQ:SAVA) said the consultant’s work was related to “early development phases of Cassava Sciences Inc’s (NASDAQ:SAVA) drug candidate [simufilam] and diagnostic test and how these were intended to work.” Cassava Sciences Inc (NASDAQ:SAVA) added that the consultant is not involved in simufilam’s phase 3 trial program.
Simufilam is one of the main assets of Cassava Sciences Inc (NASDAQ:SAVA). The company has two phase 3 trials for the drug that were fully enrolled in late 2023 and an ongoing evaluation of simufilam to treat Alzheimer’s. However, analysts have noted that Cassava Sciences Inc (NASDAQ:SAVA) has not been conducting conference calls for quite some time now and doesn’t provide regular updates. The probe around the latest consultant fraud could also deepen, with some reports suggesting the SEC as well as the Department of Justice are now investigating “two senior employees.” In this environment, Cassava Sciences Inc (NASDAQ:SAVA) cannot become a takeover target and it’d take a lot of time and hard work from the company before we see any recovery in stock.
9. ARES Capital Corporation (NASDAQ:ARCC)
Number of Hedge Fund Investors: 17
Jim Cramer said he cannot recommend ARES Capital Corporation (NASDAQ:ARCC) despite its strong 9% dividend yield.
“I have no idea what loans they have, what’s inside the company so I cannot recommended that even though it has a good yield.”
ARES Capital Corporation (NASDAQ:ARCC) is an alternative investment manager and a business development company focusing on acquisition, recapitalization, debt restructuring, financing, and leveraged buyout transactions. ARES Capital Corporation (NASDAQ:ARCC) shares have gained about 11% over the pats one year. There have been concerns that possible rate cuts would affect the stock since business development companies invest in debt securities of small to mid-sized companies, and if interest rates increase, the income from these investments can also rise, potentially increasing the BDC’s revenue. BDCs get impacted by rate cuts since they earn a spread between the interest income they receive from their investments and the interest expense they pay on their borrowings. Changes in interest rates can affect this spread.
During the first quarter, however, ARES Capital Corporation (NASDAQ:ARCC) saw strong deal activity. Commitments saw a 50% QoQ growth and a whopping 364% YoY growth. However, core EPS missed estimates and net investment income came in at $325 million, down from $345 million in the previous quarter, but higher than $318 million from last year.
The stock’s forward P/E is 8.87, down from the industry median of 10.7. However, for those who want to avoid upcoming headwinds from potential rate cuts, ARES Capital Corporation (NASDAQ:ARCC) might not be the best option.
8. Powell Industries, Inc. (NASDAQ:POWL)
Number of Hedge Fund Investors: 24
When asked about Powell Industries, Inc. (NASDAQ:POWL) in a latest program, Jim Cramer said “all of these companies are on fire.” He said it’s “another” company that does “processes and packaging” for electricity and distribution.
Powell Industries, Inc. (NASDAQ:POWL) has indeed been on fire this year, up 66% through July 4.
Analysts believe Powell Industries, Inc. (NASDAQ:POWL) growth can continue on the back of strong catalysts. Its operations are mostly focused on electrical automation and control. Over the 18 months Powell Industries, Inc. (NASDAQ:POWL) has posted strong revenue growth and beaten estimates every quarter in the period. Analysts expect Powell Industries, Inc.’s (NASDAQ:POWL) revenue growth to come in at a CAGR of 25% through this year. As of May POWL had 20% of its market cap as cash and no debt. Powell’s price/free cash flow ratio stands at 7.61, below the industry average of 13.53. Its forward P/E of 15.74 is below the industry median of 18. While Powell Industries, Inc. (NASDAQ:POWL) recently warned of capacity issues, the stock can continue to grow on the back of strong growth catalysts, which now include AI. Powell Industries, Inc. (NASDAQ:POWL) in Q2 earning call talked about the potential of data centers for its business:
We have primarily served the outside connection of the data center to the grid and see the potential for further penetration within the 4 walls of the data center where Powell Industries, Inc. (NASDAQ:POWL) can provide increased value. In addition, sales to data center customers have generally been smaller in scale and focused on individual products. However, as data centers grow in both physical size and computing power, the electrical energy demanded by these facilities will only grow in scale. As a result, the power solutions required by data centers will also grow in sophistication and require companies like Powell Industries, Inc. (NASDAQ:POWL) to build customized and fully integrated solutions within a single power control room to ensure the reliability and uptime performance of the servers to store and secure the data.
Diamond Hill Capital Long-Short Fund stated the following regarding Powell Industries, Inc. (NASDAQ:POWL) in its first quarter 2024 investor letter:
“As valuations have risen, it has become increasingly challenging to find high-quality companies trading at interesting valuations. Accordingly, we didn’t initiate any new long positions during the quarter. However, we did introduce three new short positions, including Powell Industries, Inc. (NASDAQ:POWL), Royal Caribbean Group and YETI Holdings.
Powell Industries designs, manufactures and services complex electrical systems for several industries. While recent fundamentals have been solid, we believe the valuation has become stretched for what has historically been a highly cyclical business and accordingly initiated a new short position in Q1.”
7. Skyworks Solutions (NASDAQ:SWKS)
Number of Hedge Fund Investors: 31
A caller recently asked Jim Cramer whether he should hold on to Skyworks Solutions (NASDAQ:SWKS). Cramer said “yes.”
“Actually I’d buy them.”
Cramer said Skyworks Solutions (NASDAQ:SWKS) CEO Liam Griffin is “terrific” and the stock could have a “big move” amid orders from Apple.
Skyworks Solutions (NASDAQ:SWKS) makes analog and mixed-signal chips for Apple’s iPhones. Apple accounts for about 65% of the company’s revenue. Wall Street is also bullish on Skyworks Solutions (NASDAQ:SWKS) because of the Apple factor. Last month B. Riley increased its price target on Skyworks Solutions (NASDAQ:SWKS) to $130 from $96 and said the stock has upside because Apple is a major customer of the company.
However, Skyworks Solutions (NASDAQ:SWKS) shares fell after the company gave weaker guidance in April driven by soft mobile revenue. Piper Sandler analysts Harsh Kumar and Robert Aguanno said in a note that these mobile headwinds are “short term in nature.”
Cowen analyst Matthew Ramsey downgraded Skyworks Solutions (NASDAQ:SWKS) to Hold from Buy and also cut its price target to $90 from $125.
“We remain encouraged at Skyworks’ efforts to strategically position the business following a difficult recent macro environment, yet see an approximately 10% socket loss that may or may not be temporary as too much to overcome.”
Skyworks Solutions’s (NASDAQ:SWKS) forward P/E is 17.07, lower than the sector median of 24.
6. Enbridge Inc (NYSE:ENB)
Number of Hedge Fund Investors: 32
Jim Cramer recently pitched Enbridge Inc (NYSE:ENB) as a high-yield dividend stock which also has strong growth prospects in terms of share price appreciation. Cramer was responding to a questioner who asked about the benefits of investing in equity markets versus treasury bonds which seem much safer in the current market environment.
“You want to take the long-term view. You can buy a dividend-yielding stock that is very good, like Enbridge, like ONEOK, that have growth, not just dividend.”
In May, Jim Cramer said that he likes Enbridge Inc (NYSE:ENB) and trusts its management team.
Enbridge Inc (NYSE:ENB) has been growing its dividends consistently over the past 29 years. Enbridge Inc (NYSE:ENB) is also seen as an indirect AI play since companies are set to spend a fortune on power and energy solutions to meet data center-driven demand. Enbridge Inc (NYSE:ENB) is positioned well to benefit from this since it’s one of the largest natural gas utility companies and one of the largest pipeline companies in North America. Enbridge Inc (NYSE:ENB) bought three natural gas utilities from Dominion Energy, Inc. (D), which serve 3 million people across Ohio, Utah, Wyoming, Idaho, and North Carolina. With this acquisition, ENB’s utility segment now serves over 6 million customers in North America.
5. Lantheus Holdings Inc (NASDAQ:LNTH)
Number of Hedge Fund Investors: 38
Diagnostic and therapeutic products company Lantheus Holdings Inc (NASDAQ:LNTH) is one of the stocks Jim Cramer is recommending these days. When asked about the stock in a latest program on CNBC, Cramer said the company is “terrific.”
“I wish, honestly, that Danaher would just buy them. I think that will be great news.”
Wall Street is also bullish on Lantheus Holdings Inc (NASDAQ:LNTH). According to data compiled by Yahoo Finance, average analyst price target on the stock is $105, which shows a 32% upside potential from the current levels. Wall Street expects Lantheus Holdings Inc’s (NASDAQ:LNTH) earnings to rise by 37% on a per-annum basis over the next five years.
In May, Lantheus Holdings Inc (NASDAQ:LNTH) posted strong Q1 results. Revenue growth in the period came in at 23% year over year. Lantheus Holdings Inc (NASDAQ:LNTH) also upped its full-year revenue guidance range from $1.41B to $1.445B up to $1.5B to $1.52B. One of the highlights of the quarter was the company’s expectation of mid-20% growth in sales of PYLARIFY, its prostate cancer imaging technology. PYLARIFY makes up 70% of the total revenue of Lantheus Holdings Inc (NASDAQ:LNTH), but the company is expanding into other areas as well. LNTH also upped its full-year EPS guidance, the midpoint of which shows a 14% YoY growth. Based on these factors, the stock looks like a strong buy.
4. Palantir Technologies Inc (NYSE:PLTR)
Number of Hedge Fund Investors: 45
Jim Cramer in a latest program yet again voiced his frustration regarding Palantir’s business visibility, saying the company is like a “giant black box.” He said it’d “help” if the company would “tell what they do.”
Wall Street disagrees with Cramer. Recently, BofA added Palantir in its best of breed stocks list. Wedbush analyst Dan Ives said in a latest note that Palantir Technologies Inc (NYSE:PLTR) is one of the stocks that can benefit from the “AI party” that is just getting started. Ives counted Palantir Technologies Inc (NYSE:PLTR) among the stocks that will ride the AI wave thanks to their “massive installed bases” in both the enterprise and consumer spaces.
Wedbush’s Dan Ives said the latest selloff around Palantir Technologies Inc (NYSE:PLTR) was a “golden” buying opportunity. Ives has an Outperform rating and a $35 price target on Palantir Technologies Inc (NYSE:PLTR). Palantir Technologies Inc (NYSE:PLTR) is trading at a high P/E multiple of 170, which has alarmed many. However, Palantir Technologies Inc (NYSE:PLTR) bulls believe Palantir Technologies Inc’s (NYSE:PLTR) consistent contract wins from the government and AI-related growth catalysts justify this multiple. Analysts are bullish on Palantir Technologies Inc’s (NYSE:PLTR) AI platform (AIP), which helps companies and governments in decision making based on AI technologies. In the first quarter alone, Palantir Technologies Inc (NYSE:PLTR) saw a 16% YoY increase in government contracts. US government revenue jumped 12% year over year.
Carillon Scout Mid Cap Fund stated the following regarding Palantir Technologies Inc. (NYSE:PLTR) in its first quarter 2024 investor letter:
“The top contributor to return for the quarter was Palantir Technologies Inc. (NYSE:PLTR). Sentiment improved on Palantir after it reported stronger than expected commercial customer revenue and free cash flow. U.S. commercial growth was especially encouraging, as U.S. commercial revenue was up by a large percentage year over year for the fourth quarter and U.S. commercial customer count grew nearly as much. We expect Palantir to become one of the premier artificial intelligence (AI) software providers, built on its Foundry and AIP platforms.”
3. Texas Instruments Inc (NASDAQ:TXN)
Number of Hedge Fund Investors: 49
Jim Cramer last month recommended Texas Instruments Inc (NASDAQ:TXN) during a ‘Lightning Round’ segment on his program. Cramer said you’d want to buy the stock as he thinks it can go “higher.” Cramer also praised Texas Instruments Inc’s (NASDAQ:TXN) management team.
UBS recently published a list of high-quality stocks that also pay dividends. Texas Instruments Inc (NASDAQ:TXN) made it to the list. The stock has a 2.61% dividend yield as of July 3.
Texas Instruments Inc’s (NASDAQ:TXN) valuation has been a concern for many amid lack of strong growth catalysts. The stock’s forward P/E is 37.80, much higher than the industry median of 24. Average analyst price target on the stock is $181, which is lower than its July 3 closing price of $198. According to data from Yahoo Finance, Wall Street expects Texas Instruments Inc’s (NASDAQ:TXN) earnings to fall by 6% over the next five years on a per-annum basis.
Texas Instruments Inc (NASDAQ:TXN) makes most of its revenue from Industrial applications, Automotive and Personal Electronics. During the first quarter earnings call the management said the industrial segment was down “upper-single digits. The automotive market was down mid-single digits. Personal electronics was down mid-teens. Next, communications equipment was down about 25%.”
“First, we saw personal electronics was the first market that went into the correction. It really is — was the first to come out in the last few quarters, I’d describe it as behaving more seasonal. If you go to the other end of the spectrum, we have, had industrial, which has been declining sequentially from some time. And over the last few quarters, we’ve been talking about how there’s some asynchronous behavior inside of the 12, 13 sectors that we have there. That continued inside of the quarter. So we have got some of the later-cycle sectors that are continuing to decline and declining at double-digit rates. But there are some that are beginning to — begin to slow in the declines and even a couple that grew sequentially.”
2. Intuitive Surgical Inc (NASDAQ:ISRG)
Number of Hedge Fund Investors: 79
Cramer said in a latest program that every time ISRG is down, I “slam” the “buy, buy, buy” button. Cramer said Intuitive Surgical has been “incredibly impressive.”
Wall Street agrees with Cramer. Bank of America called the robotic surgery-focused company a best of breed stock for the third quarter in a latest report. Intuitive Surgical Inc (NASDAQ:ISRG) bulls believe the stock is poised for long-term growth as robots will play a key role in surgeries and the broader healthcare industry in the coming years. During the first quarter, Intuitive Surgical Inc (NASDAQ:ISRG) procedure volume, which shows the number of surgical procedures carried out by Intuitive Surgical Inc (NASDAQ:ISRG) robots, jumped 16% year over year, coming in at the higher end of its estimates. Revenue in the quarter jumped about 12% to $1.89 billion, beating expectations by $20 million. Intuitive’s efforts to come out of the COVID-induced slowdown are working. Its revenue has grown at a 17.8% CAGR after the pandemic, compared with the pre-pandemic revenue CAGR of 18.3%.There are about 8,600 da Vinci systems (Intuitive Surgical robot) installed at healthcare facilities across the globe. Some estimates suggest the robotic surgery market is expected to grow at a CAGR of 11% through fiscal 2026. With a close to 70% market share, Intuitive Surgical is positioned well to benefit from this organic growth. Wall Street expects Intuitive Surgical Inc (NASDAQ:ISRG) earnings to grow 17% next year and at 12.6% over the following five years on a per-annum basis.
Baron Health Care Fund stated the following regarding Intuitive Surgical, Inc. (NASDAQ:ISRG) in its first quarter 2024 investor letter:
“Intuitive Surgical, Inc. (NASDAQ:ISRG) sells the da Vinci surgical robotic system for minimally invasive surgical procedures. The stock rose after the company announced the planned launch of the da Vinci 5, its next-generation, multiport robotic system. The new system has 10,000 times the computing power of its predecessor and features over 150 design upgrades such as force feedback, improved visualization, and productivity enhancements. Intuitive plans to launch the device at a small number of customers in the U.S. before releasing it more broadly. We think the da Vinci 5 will enable Intuitive to continue to generate strong revenue and earnings growth and maintain its competitive edge.”
1. Marvell Technology Inc (NASDAQ:MRVL)
Number of Hedge Fund Investors: 87
Answering a question about Marvell in a latest program, Cramer said that Matt Murphey (MRVL CEO) has a “division that’s unbelievable and the other one that’s not.” Cramer thinks the “unbelievable” vision of Marvell “continues to get” better and the latter is showing improvement.
“Therefore you should hold on to it.”
Marvell Technology Inc (NASDAQ:MRVL) is another stock JPMorgan believes could “dominate” the customer application-specific integrated circuit, or ASIC, market. Analysts at JPMorgan estimate that Marvell Technology Inc (NASDAQ:MRVL) could generate between $1.6 billion and $1.8 billion in AI revenue from ASICs and networking this year and between $2.8 billion and $3 billion next year.
Marvell Technology Inc (NASDAQ:MRVL) shares recently tumbled following mixed Q1 results. However, some analysts believe the stock could be an opportunity to buy on the dip. Oppenheimer analyst Rick Schafer maintained his outperform rating on the stock and upped his price target to $90 from $80.
Analysts believe that Marvell Technology Inc. (NASDAQ:MRVL) could be the next major AI play as Marvell Technology Inc. (NASDAQ:MRVL) begins to roll out AI-specific products like Spica™ 800G PAM4 DSP platform for optical interconnects. Marvell Technology Inc. (NASDAQ:MRVL) also sells Application-specific integrated circuits (ASICs) for data centers, which are seeing a huge boost amid the AI revolution.
According to data compiled by Yahoo Finance, average Wall Street price target for Marvell Technology Inc. (NASDAQ:MRVL) is $87.7, which represents a 14% upside potential from the current levels.
However, Marvell Technology Inc’s (NASDAQ:MRVL) negative revenue growth has alarmed many especially when peers are growing at a faster pace. In the first quarter, revenue fell 12.2% on a YoY basis. Marvell Technology Inc (NASDAQ:MRVL) has a $3 billion of net debt. In fiscal 2025, Marvell Technology Inc’s (NASDAQ:MRVL) FCF is expected to come in at $1 billion, excluding taxes and management’s stock options. While the stock’s PE ratio (TTM) is 52, it’s trading at 32X 2025 EPS estimate. This makes Marvell Technology Inc. (NASDAQ:MRVL) a stock to consider only for the long-term. In the short-term there are much better options to invest in the AI space other than Marvell Technology Inc. (NASDAQ:MRVL).
While we acknowledge the potential of Marvell Technology Inc (NASDAQ:MRVL) , 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 Marvell Technology Inc (NASDAQ:MRVL) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: Michael Burry Is Selling These Stocks and Jim Cramer is Recommending These Stocks.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also look at the 9 Best Pizza Stocks to Buy Now and the 12 Best Dividend Stocks Under $25.
