Jim Cramer’s Top 10 Stock Picks You Can’t Ignore

8. Alight Inc. (NYSE:ALIT)

Number of Hedge Fund Investors: 42

When a viewer asked Jim Cramer about his thoughts on Alight Inc. (NYSE:ALIT), he stated that he wants to see the firm start making money before he forms an opinion, as the company has not achieved profitability yet.

“Okay, I want to see that company actually make money before I weigh in on it. It has not been able to do so yet.”

Alight Inc. (NYSE:ALIT) is a strong investment due to its excellent financial performance, shift to cloud-based solutions, and focus on improving operational efficiency. Alight Inc. (NYSE:ALIT)’s migration to the cloud has saved $75 million annually, enhancing its services while cutting operational costs.

Alight Inc. (NYSE:ALIT) has also made significant progress in reducing debt, retiring $740 million and lowering net leverage to 2.8 times EBITDA. A $155 million share buyback further boosts shareholder value. Growth in its Business Process-as-a-Service (BPaaS) segment, which expanded by 12.7% and now makes up 21% of total revenue, highlights Alight Inc. (NYSE:ALIT)’s shift to more profitable, recurring revenue streams.

Additionally, Alight Inc. (NYSE:ALIT) has improved its margins, with an adjusted gross margin up by 350 basis points and an EBITDA margin of 25%, showcasing its ability to manage costs and increase profitability. These factors make Alight Inc. (NYSE:ALIT) well-positioned for long-term success in the human capital solutions market.

Meridian Growth Fund stated the following regarding Alight, Inc. (NYSE:ALIT) in its Q2 2024 investor letter:

“Alight, Inc. (NYSE:ALIT) is a leading cloud-based human capital technology provider of enterprise-level software that helps businesses and their employees manage critical human resources functions. Through its investments in software and automation, Alight has built a distinct advantage that allows its customers to deliver HR services at a much lower cost while providing a better experience for employees.

We slightly trimmed the position early in the quarter when the stock appreciated on the announced sale of a non-strategic business unit and news that an activist investor had initiated a position. Later in the period, the stock declined when Alight announced weaker-than-expected results. We believe the softer quarter will prove to be an isolated event.”