Jim Cramer, host of Mad Money, discussed how the stock market responds not to current conditions but to expectations about the future. According to Cramer, the reason behind what makes interest rate hikes damaging to Wall Street, well before Main Street feels the consequences, or why stocks often soar the moment there is any indication that rate hikes might come to an end, is the same.
READ ALSO: 10 Stocks Jim Cramer and Analysts Are Watching and 14 Stocks on Jim Cramer’s Radar.
“I’m talking about the very nature of the stock market itself. I like to say that the market’s a forecasting machine. The business is all about anticipation. Millions of traders and investors make bets on stocks.”
Cramer explained that the result is that the market typically reflects Wall Street’s collective expectations for the future, usually projecting six to nine months ahead, and noted that it is the prevailing mindset. He added that when a new piece of data emerges, one that shifts the expected outlook, it can have an immediate and significant impact on stock prices.
“The bottom line here: Everyone in this business is constantly looking at the data to piece together their own worldview, a view of how things will look in the near to medium-term future. When the Fed or the president or some foreign actor does something that dramatically alters Wall Street’s worldview for the worse, it can slay a bull market in the blink of an eye, leading you to some frightening declines, which is why I am trying to prepare you for them… in any business cycle.”
Our Methodology
For this article, we compiled a list of over 200 stocks that Jim Cramer was bullish on during episodes of Mad Money aired between May 22 and June 11. We narrowed the list to 10 stocks that had a forward price-to-earnings ratio of under 15 (as of June 19) and were the most widely held by institutional investors. We listed the stocks in ascending order of their hedge fund sentiment, which was taken from Insider Monkey’s Q1 database of 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).
10 Cheap Jim Cramer Stocks to Invest In
10. Amentum Holdings, Inc. (NYSE:AMTM)
Number of Hedge Fund Holders: 37
Forward P/E: 10.41
Amentum Holdings, Inc. (NYSE:AMTM) is one of the 10 cheap Jim Cramer stocks to invest in. On June 12, the company announced a new contract from Atomic Energy of Canada Limited to deliver operations and management services for Canadian Nuclear Laboratories. The work will be carried out through Nuclear Laboratory Partners of Canada, Inc., a joint venture.
The contract is valued at an average of CAD$1.2 billion per year. It includes a six-year base term with the possibility of extensions based on performance, for up to twenty years. The transition is expected to begin this summer.
As this joint venture strengthens Amentum’s (NYSE:AMTM) stronghold in North American nuclear, the company is already one of the UK’s major players in the energy market. In May, the company was appointed as the program manager and lead design engineer for Sizewell C, a new nuclear power station intended to support the United Kingdom’s energy infrastructure. According to the CEO’s comments at the latest earnings call, the long-term contract involves the construction of a station featuring two 1.6-gigawatt reactors, with the capacity to supply electricity to six million homes annually.
It is worth mentioning here that on June 11, Cramer extensively commented on the company when he said:
“Now, when Amentum reported its latest quarter in early May, the results were good, better than expected revenues, a healthy earnings beat, management reaffirmed the full year earnings and cash flow guidance. Not bad. Sounds good. Then how come the stock dropped 4.5% the next day? Well, it seems that the market wasn’t overly impressed with Amentum’s growth story. While the company beat estimates, [it] still only posted 1% revenue growth year over year, and the earnings were just up 4%. That’s not good enough…
Amentum’s laid out a long-term growth plan calling for 4 to 6% compound annual revenue growth through 2028. They haven’t been able to gin up much excitement with that forecast. There’s a lot of companies that are growing much faster that aren’t that expensive, but I think they can hit these numbers… It’s important to remember that Amentum isn’t a newcomer to this space. It’s made up of a series of legacy businesses with deep roots in federal contracting, businesses with incumbent status, and longstanding agency relationships.
This familiarity is something incredibly important. When the government decide[s] where to allocate funds, they also have the scale to compete. Their $45 billion in backlog is one of the highest in the sector. This isn’t some fly-by-night outfit that’s going to have to fight tooth and nail for government contracts. This is a well-known commodity in a space where that really matters. … If there’s one thing that gives me pause about the stock, it seems that… and this is a… theme… for many of our homework names, that’s the ownership concentration.
More than 35% of Amentum is still owned by American Securities and Lindsay Goldberg, the company’s former private equity sponsors. This private overhang, it can be a real issue if these firms ever decide to unload their shares… The bottom line: While I’m worried about the private equity shareholders, I think this stock already has too much caution priced into it. Amentum sells for less than 10.5 times this year’s earnings estimates. That’s a pretty compelling valuation for a company with this kind of scale and long-term positioning. At the end of the day, I’d like to see some of the large shareholders, these private guys, reduce their stakes before jumping in. But Amentum’s definitely worth keeping on your radar.”
Amentum (NYSE:AMTM) is a holding company with subsidiaries that provide services in environmental sustainability, intelligence, analytics, engineering, research, and citizen systems.
9. DICK’S Sporting Goods, Inc. (NYSE:DKS)
Number of Hedge Fund Holders: 44
Forward P/E: 12.18
DICK’S Sporting Goods, Inc. (NYSE:DKS) is one of the 10 cheap Jim Cramer stocks to invest in. On June 12, the company and Uber announced a partnership that will make a wide range of DICK’S products available on the Uber Eats platform. Customers can now order sporting goods, athletic apparel, footwear, team sports gear, golf equipment, and fan merchandise for on-demand or scheduled delivery from over 800 DICK’S Sporting Goods and Golf Galaxy locations nationwide.
DICK’S (NYSE:DKS) has recently made several noteworthy deals, the most significant of them is its acquisition of Foot Locker for approximately $2.5 billion. At its Q1 2025 earnings call, the Executive Chairman, Edward Stack, said that the company has long admired Foot Locker, and the acquisition positions the combined business to participate in the $300 billion global sports retail market and expand its footprint to more than 3,200 stores worldwide.
Furthermore, on May 29, Cramer recommended buying the stock as he said:
“Oh, I like DICK’S very much and you know a lot of people, that’s both Ed Stack but don’t forget Lauren Hobart. Lauren Hobart as CEO is fantastic, a lot of people think that they stubbed their toe when they bought Foot Locker. I’m going to say the opposite. I’m going to say that they may have stubbed their toe, but this stock is so much down. It was at 254, now it’s at 181. It more than reflects [that] they can write off Foot Locker right now, and frankly, yeah, of course, they don’t need to, it would still work out. Buy DICK’S Sporting Goods.”
DICK’S Sporting Goods (NYSE:DKS) is a retailer that provides sports equipment, apparel, footwear, and accessories through multiple sales channels.
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