We recently compiled a list of the Jim Cramer’s Latest Lightning Round: 8 Stocks in Focus. In this article, we are going to take a look at where Texas Pacific Land Corporation (NYSE:TPL) stands against the other stocks that Jim Cramer’s focused on.
Jim Cramer, the host of Mad Money, expressed strong views regarding day trading on Friday, urging novice investors to avoid the temptation of risky market practices. His warning followed an article from The Wall Street Journal, titled “More Men Are Addicted to the ‘Crack Cocaine’ of the Stock Market,” which discussed how an increasing number of investors are developing serious gambling addictions through speculative trading. Cramer emphasized:
“Unless you’re a professional, I’m dead set against day trading, particularly the kind that is based on zero-days-to-expire or zero DTE options. These are options that expire the same day.”
He compared these trades to gambling, urging that they be stopped, as they serve no purpose other than to hook people on the addictive nature of the stock market. Cramer, who highlighted that he has moved away from day trading since retiring, stressed the importance of a more cautious and informed approach. He now advocates for “buy and homework,” his version of buy-and-hold investing, which reflects his belief that things can change with a company and require continuous evaluation.
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Cramer called for self-regulation within the industry and said:
“There’s no reason to push people into zero day options other than pure greed. The industry’s encouraging bad behavior, that’s just plain wrong.”
Cramer further pointed out that day trading is not limited to options but extends to other high-risk investments, such as cryptocurrencies, uranium stocks, and emerging technologies like quantum computing, commercial space, and future mobility stocks. While he expressed confusion over who creates these stocks, he noted that their volatility and high trading volumes indicate they are often used as vehicles for speculative trading rather than sound investments.
Cramer questioned whether the markets could eliminate this behavior, but he firmly believes that a collective value judgment can be made. He particularly criticized the brokerage houses that profit from encouraging risky behavior, stating that these firms must be held accountable for promoting an environment that feeds into people’s gambling instincts.
“After all the markets were created for investing, not day trading on the direction of stocks. There’s a big difference between making an informed investment and pure gambling.”
He called for stronger measures to protect individuals from the dangers of day trading, suggesting that, while it may be impossible to completely eliminate high-risk trades, at the very least, these products should come with warning labels. He condemned those who continue to push these high-risk options, asking whether they truly need the money so badly, and saying, “Shame on you.”
Our Methodology
For this article, we compiled a list of 8 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on December 20. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
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).
Texas Pacific Land Corporation (NYSE:TPL)
Number of Hedge Fund Holders: 20
Cramer mentioned that he previously liked Texas Pacific Land Corporation (NYSE:TPL) but also cautioned to “hold off”.
“Alright, this stock has been just a horse, but all really it is just royalties off of oil. We have liked it, but it’s now gone up so much. I’ve gotta tell you, I want to hold off.”
Texas Pacific Land (NYSE:TPL) is a company focused on land and resource management, water services, land leasing, and the sale of materials. According to management, the company is able to take a more proactive approach with its surface assets, allowing greater control over how and when these assets are developed. Although revenue from non-oil and gas sources is currently minimal, it has signed numerous contracts over the past few years to diversify its portfolio.
Over the past 24 months, the company has contracted over 700 megawatts of solar energy projects that are currently in development. Additionally, as per the management, the company is actively involved in several other projects, including seven utility-scale battery projects, four Bitcoin mining operations, and 78 megawatts of active power generation, with another 50 megawatts in development.
Texas Pacific Land (NYSE:TPL) management has expressed confidence in the opportunities emerging outside of the traditional oil and gas sector. They noted a growing interest in wind power and mentioned ongoing work in the data center space, a sector the company has been exploring for some time. Furthermore, management emphasized that the company is well-positioned to provide both land and water solutions as these new opportunities continue to unfold in West Texas, an area where the company has a significant presence.
Overall, TPL ranks 8th on our list of stocks that Jim Cramer’s focused on. While we acknowledge the potential of TPL as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TPL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
