We recently published a list of Jim Cramer on 10 Stocks With The Biggest Declines Last Week. In this article, we are going to take a look at where Sprouts Farmers Market, Inc. (NASDAQ:SFM) stands against other stocks with the biggest declines last week that Jim Cramer discussed.
On Monday, Jim Cramer, the host of Mad Money, analyzed the 10 largest stocks that suffered the most significant declines the previous week. He explained that examining the biggest losers can offer important insights into the current state of the market.
“Last Thursday and Friday were just brutal with the S&P plunging a combined 2.1%, Nasdaq [and] Dow both fell 2.7% as we got some soft economic data paired with some signs that the Fed, they weren’t that eager to make cuts.”
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Cramer emphasized that although the average decline was only 2-3% over the two-day selloff. However, focusing on individual stocks, the damage was much worse. He noted that growth stocks, which had been performing well, began to falter starting on Wednesday. Cramer then reviewed the largest pullbacks from the last three days of the week.
He explained that his analysis covered all components of the S&P 1500, specifically those with market capitalizations above $10 billion, ensuring a thorough and rigorous review. And when looking at these names collectively, Cramer noted that there is a lot to learn about the market dynamics. He went on to say:
“First for the hottest of the hot stocks without valuation support, they’re always vulnerable to sharp pullbacks usually it’s because of the bond market. Not this time.”
He added that when investors buy into momentum stocks, the gains can come quickly but just as easily disappear. Furthermore, he pointed out that many companies that were once considered solid performers are now reporting good earnings but offering disappointing guidance, which signals potential trouble ahead. He also noted that the less-than-truckload freight companies are suddenly out of favor, a sign of a weakening economy.
“Here’s the bottom line: At least in the eyes of Wall Street, the US economy’s looking quite a bit worse than it did just a month ago. Fortunately, it’s now a new week and even started off well with some decent gains for most stocks today, although there was a bit of collapse at the close. But we can always learn something from looking at the results of the tape and last week we got a real education from the momentum buyers trapped in the school of hard knocks.”
Our Methodology
For this article, we compiled a list of 10 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on February 24. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the fourth quarter of 2024, which was taken from Insider Monkey’s database of over 1,000 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A bright, colorful display of fresh produce in a grocery store.
Sprouts Farmers Market, Inc. (NASDAQ:SFM)
Number of Hedge Fund Holders: 47
Discussing Sprouts Farmers Market, Inc. (NASDAQ:SFM) during the episode, Cramer said:
“The sixth biggest loser from Wednesday through Friday, one that we love, Sprouts Farmers Market. It fell 16.4% during that period. Most of the company, most of that coming after the company reported on Thursday night that bizarrely, Sprouts reported really strong numbers. This was a great quarter and all the analysts raised their estimates. Yet the stock rolled over anyway. Why? I saw someone complain that October was the best month of the quarter… The company’s full-year same-store sales forecast was much lower than its first-quarter same-store sales forecast, which suggests that growth will continue slowing throughout the year. But honestly, what really did it, I’ll tell you what did it, Sprout stock was up 220% in the 12 months before this quarter and I think this is another momentum stock that simply got too hot to handle at the last moment. And maybe it’s gonna stay that way.”
Sprouts Farmers Market, Inc. (NASDAQ:SFM) is a U.S.-based retailer specializing in fresh, natural, and organic food products, providing a variety of both perishable and non-perishable items under the Sprouts brand.
Overall, SFM ranks 6th on our list of stocks with the biggest declines last week that Jim Cramer discusses. While we acknowledge the potential of SFM 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 timeframe. If you are looking for an AI stock that is more promising than SFM 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.