On Friday, Jim Cramer, the host of Mad Money, discussed a major market movement where a money manager decided to sell off billions of dollars worth of technology stocks and economically sensitive equities. At the same time, the manager moved the proceeds into stocks that are typically seen as less affected by economic downturns. He commented:
“On days like today, it’s easy to miss the forest for the trees, but if you can grasp the big picture, you’ll find incredible opportunities. Like I mentioned at the top of the show, the wild action you saw this morning was the result of what’s known as a program trade and I think you are owed an explanation of what that means.”
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Cramer explained that in this case, a fund manager controlling billions of dollars was looking to exit positions in tech and consumer-dependent companies and shift into defensive stocks with less exposure to economic cycles. Cramer noted the sharp swings away from software companies, semiconductors, artificial intelligence, and financial stocks toward healthcare, pharmaceuticals, and consumer packaged goods.
“The thought behind a program like this is simple. The manager believes we’re heading into a severe slowdown, so he wants to dump the stocks that need a strong economy and swap in the stocks that do fine in a recession.”
Cramer added that the execution of such a move is not simple, as trying to execute these trades rapidly can distort the market. He pointed out that billions of dollars were being moved out of one group of stocks, heavily tied to economic performance, and into another group that supposedly has little to no sensitivity to economic conditions. Cramer was critical of the move, calling it “total lunacy,” especially when the results of such trades were corrected later in the day.
“I have total contempt for people who buy or sell once, distorting the whole market like this. This isn’t the 90s where there was all sorts of liquidity. This is 2025 and… you’re going to move stocks like this and get horrendous reports. Shame on the bozos. The next time something like this happens, don’t panic. Take advantage of these clowns by taking the other side of the trade but only if you’re ready to move.”
Our Methodology
For this article, we compiled a list of 60 stocks that Cramer was bullish on during episodes of Mad Money aired in January. We narrowed the list to 10 stocks that were most favored by analysts. We listed the stocks in ascending order of their average analyst price target upside as of March 7. We also mentioned the hedge fund sentiment around each stock, which was taken from Insider Monkey’s Q4 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).
10 Stocks on Jim Cramer and Wall Street’s Radar
10. U.S. Bancorp (NYSE:USB)
Average Price Target Upside: 27.46%
Number of Hedge Fund Holders: 48
U.S. Bancorp (NYSE:USB) takes the 10th spot on our list of stocks on Cramer and Wall Street’s radar. Before the bank reported in January, Cramer remarked:
“Thursday we have more of the same. This time, Bank of America, U.S. Bancorp, Morgan Stanley, and PNC Financial. I actually expect all these to be good too.”
U.S. Bancorp (NYSE:USB) is a financial services holding company that provides a diverse array of products, including deposit services, loan options, credit card offerings, asset management, insurance, investment solutions, and corporate services.
According to TipRanks, on February 24, Barclays analyst Jason Goldberg reiterated a Buy rating on USB stock and set a price target of $61.00. Additionally, 25 analysts have given a consensus Buy rating on U.S. Bancorp (NYSE:USB) stock with an average price target of $57, as of March 7.
9. DuPont de Nemours, Inc. (NYSE:DD)
Average Price Target Upside: 27.96%
Number of Hedge Fund Holders: 58
On January 15, discussing DuPont de Nemours, Inc. (NYSE:DD) during the episode, Cramer said:
“Oh, DuPont. Okay, DuPont announced after the close that they’re accelerating the spinoff of one of the divisions and they’re keeping the other, and I think it’s gonna bring out more value. I say you hold on to DuPont, it’s very cheap versus the rest of the group.”
DuPont de Nemours (NYSE:DD) provides advanced materials and solutions across a range of global markets, with a focus on industries such as electronics, safety, water purification, and other specialized sectors. On January 23, Cramer remarked:
“DuPont did not miss the quarter. It’s still not up. They were going to split into three, now they’re splitting into two, electric and chemicals and water.”
On February 25, UBS analyst Joshua Spector increased the price target on DuPont de Nemours (NYSE:DD) from $102 to $103 and kept a Buy rating on the stock. In a research note, UBS stated that now is an opportune time to invest in the shares and highlighted the company’s exposure to electronics and short-cycle markets as favorable factors.
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