We recently published a list of Jim Cramer Recently Shed Light on These 9 Stocks. In this article, we are going to take a look at where Wingstop Inc. (NASDAQ:WING) stands against other stocks that Jim Cramer recently highlighted.
Jim Cramer, host of Mad Money, recently discussed a possible looming energy crisis in the U.S. that has taken many by surprise. He warned that if the country doesn’t act swiftly, it will soon be overwhelmed by an energy shortfall. According to Cramer, we need to tap into every available energy source including natural gas, wind, geothermal, and hydroelectric power. However, he stressed that the most critical energy source right now is nuclear power. He added:
“Crisis comes down to the fact that we had no real industrial growth in this country for decades so we haven’t had to build much energy infrastructure. Now all of a sudden these data centers start coming online like the ones that will be part of Stargate, the Oracle, SoftBank, OpenAI project… And these data centers consume insane amounts of electricity. It’s a level of demand that nobody saw coming. So after years where we spent more time decommissioning power plants and building new ones, we suddenly gotta go back into growth mode.”
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Cramer went on to discuss an energy source that many are reluctant to consider: coal. While it may seem counterintuitive, he argued that coal could make a comeback in the U.S. energy mix.
“When the president gave his inaugural address on Monday, he declared a national emergency aiming to produce more domestic fossil fuels, including coal. Once the mainstay utility fuel, coal has been phased out year after year after year because it is terrible for the environment. 10 years ago, coal-based fuel was responsible [for] about 33% of electricity. Now it’s fallen to 15%.”
Yet, with the push to decommission nuclear plants, and the rising cost of natural gas, Cramer suggested that coal might need to be reintegrated into the energy mix. He argued that, despite the environmental drawbacks, the demand for power is now so great that coal’s long decline could be nearing its end.
“Under this president, coal could have… a renaissance. Sure, coal’s time has come and gone, but it will come again because the data center inspired energy crisis really is so pressing that there’s not really a choice anymore. Yes, the demand is that great, [and] we so foolishly mothballed good nuke plants that it wouldn’t surprise me if coal’s long decline may have finally run its course.”
Our Methodology
For this article, we compiled a list of 9 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on January 22. 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).
Customers savoring boneless wings at a bustling restaurant owned by the company.
Wingstop Inc. (NASDAQ:WING)
Number of Hedge Fund Holders: 39
Cramer showed disgruntlement toward Wingstop Inc. (NASDAQ:WING) as he pointed out that management did not give him any reason to hold onto the stock.
“Wingstop, when they reported last did not give me an explanation about why they didn’t do well and so therefore I went off on them. Now I have to tell you, I don’t personally dislike them. I have liked the product. But when you come on the show, when you talk good, you know, and say good things and I say good things about you and then you don’t give me the information I needed to say why I should continue to like you, then I have to turn on you. It’s just what I do.”
Wingstop (NASDAQ:WING) is a restaurant chain known for its specialty in serving classic and boneless wings, tenders, and chicken sandwiches. In November 2024, Cramer criticized the company’s management for failing to acknowledge a significant earnings shortfall during its third-quarter earnings call. He said:
“Wingstop dwelled on the good, not blowout, same-store sales and didn’t even mention the out and out earnings shortfall. 88 cents, looking for 96.”
Cramer noted that Wall Street dislikes not only big misses but also when management tries to downplay them, which led to Wingstop’s stock drop. It should be noted that the company reaffirmed its guidance for the fiscal year 2024, predicting around 20% growth in domestic same-store sales.
Wingstop (NASDAQ:WING) also updated its projected SG&A expenses, now expecting them to fall between $117.5 million and $118.5 million, compared to its earlier estimate of $114 million to $116 million. Furthermore, it revised its depreciation and amortization estimate to approximately $19 million, slightly higher than the initial range of $18 million to $19 million.
Overall, WING ranks 3rd on our list of stocks that Jim Cramer recently highlighted. While we acknowledge the potential of WING 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 WING 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.
