We recently published a list of 10 Small-Cap Stocks Jim Cramer is Talking About Amid Latest Market Rotation. Since Mueller Industries Inc (NYSE:MLI) ranks 6th on the list, it deserves a deeper look.
Recently Jim Cramer talked about the rally in the small-cap-heavy Russell 2000 Index, saying these kinds of rebounds show you have to “stay invested” in the market to make “big money.”
“When I say stay in I mean you have to be as invested as you possibly can be so you don’t miss monster moves.”
Cramer said the Russell 2000 index rally was led by several “oddball” stocks that many people aren’t aware of.
“The biggest winners in the Russell today are all the companies I either don’t know or I barely heard of. You know I know thousands of stocks!”
Cramer highlighted that almost half of the stocks rising in the Russell 2000 index were biotech or healthcare companies that are losing money. Cramer believes these companies might be worth something only “years from now” and called them “risky” stocks.
Jim Cramer talked about what he called “small- and medium-sized businesses” which he believes can benefit from two possible developments in the near term: a Trump win in the election and rate cuts. A Donald Trump presidency, according to Cramer, could provide a level-playing field for these small companies which often get left behind by major companies amid tough regulation. Since Trump is expected to decrease regulations if he comes to power, these small companies could thrive in this new environment. Cramer said that money is coming from the “sidelines” as investors begin to invest in stocks instead of hoarding cash to earn interest income.
Cramer has been talking about several small-cap stocks in his programs lately. In a recent program, he mentioned several small-cap stocks that were moving recently and briefly discussed their businesses. We picked these stocks and analyzed their fundamentals and growth potential. We also mentioned hedge fund sentiment around these stocks. 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).
Mueller Industries Inc (NYSE:MLI)
Number of Hedge Fund Investors: 27
Mueller Industries Inc (NYSE:MLI) is an industry leader in copper and brass extrusion and forming. It makes HVACR products, including insulated duct systems and refrigeration valves. Mueller Industries Inc (NYSE:MLI) makes pipes, tubes and valves for residential and commercial construction markets. About 50% of the company’s sales come from construction plumbing, a third from construction HVAC, with refrigeration, manufacturing, and transportation making up the rest. Jim Cramer in a latest program called Mueller Industries Inc (NYSE:MLI) “cheap” and said that the stock trades 14 times earnings.
“I like it a lot,” Cramer said.
Analysts believe an expected rebound in construction activity and interest rate cuts are upcoming growth catalysts for Mueller Industries Inc (NYSE:MLI) in the short term.
Another solid reason to own Mueller Industries Inc (NYSE:MLI) is its dividend. The company announced a 33% dividend increase earlier this year. It’s been paying regular dividends over the past 20 years.
Overall, Mueller Industries Inc (NYSE:MLI) ranks 6th on Insider Monkey’s list titled 10 Small-Cap Stocks Jim Cramer is Talking About Amid Latest Market Rotation. While we acknowledge the potential of Mueller Industries Inc (NYSE:MLI), our conviction lies in the belief that 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 MLI 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.
