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.”
READ ALSO: Jim Cramer Put These 8 Stocks Under the Microscope and Jim Cramer’s Latest Lightning Round: 8 Stocks in Focus
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.
8. Bank of America Corporation (NYSE:BAC)
Average Price Target Upside: 29.23%
Number of Hedge Fund Holders: 113
Bank of America Corporation (NYSE:BAC) was mentioned in an episode aired in January, and here’s what Mad Money’s host had to say:
“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.”
Bank of America (NYSE:BAC) is a financial institution offering a wide variety of banking and financial services, such as savings and checking accounts, loans, investment management, and wealth management solutions. On March 7, Baird upgraded BAC stock from Neutral to Outperform, raising its price target to $50 from $45.
According to the analyst’s research note, the recent weakness in U.S. bank stocks has created an improved risk/reward opportunity. The firm believes that while the sector may remain volatile in the short term, the potential for upside now outweighs the downside risk for several banks, as the excitement around the election has subsided. Baird views Bank of America (NYSE:BAC) as a strong franchise available at a reasonable price.
7. Capital One Financial Corporation (NYSE:COF)
Average Price Target Upside: 29.64%
Number of Hedge Fund Holders: 89
Capital One Financial Corporation (NYSE:COF) popped up on Cramer’s and Wall Street’s radar and in January, earned a bullish comment from Cramer when he stated:
“Now let me tell you a funny thing here. Capital One is actually my favorite. I put it in the bullpen so to speak. I’m thinking about buying it because of the Discover, you know, because of this Discover merger, which is gonna be so bullish, and because I don’t think there will be usury fees. So I want to go against what the president’s musing was right there and buy Capital One, COF, a really well run, really, really well run credit card, credit card company.”
Capital One Financial (NYSE:COF) is a financial services holding company that provides a range of products, such as credit cards, loans, and banking services, as well as advisory and capital markets solutions.
On February 27, Keefe Bruyette analyst Sanjay Sakhrani noted that the Consumer Financial Protection Bureau’s decision to drop its enforcement action against Capital One is an additional positive for the upcoming Discover deal. Keefe assigned an Outperform rating to Capital One Financial (NYSE:COF), with a price target of $232.
6. Builders FirstSource, Inc. (NYSE:BLDR)
Average Price Target Upside: 30.10%
Number of Hedge Fund Holders: 59
In January, Cramer noted that he has been recommending Builders FirstSource, Inc. (NYSE:BLDR) for years, viewing it as a strong play on the ongoing shortage of single-family homes. While he acknowledged that the company has struggled during periods of rising interest rates, particularly in the past few months, he remains confident in its long-term potential. He added:
“And if you’re willing to believe that rates can keep falling, then I have to say that Builders FirstSource is a fantastic stock for this environment. Of course, last week’s 70% rally wasn’t entirely about interest rates. On Thursday night, the stock caught a very enthusiastic coverage initiation from Raymond James with an outperform rating.”
Cramer echoed Raymond James’ view that Builders FirstSource (NYSE:BLDR) is undervalued by Wall Street. He went on to say:
“Let me give you one more reason to like Builders FirstSource: the substantial rebuilding effort that’s ahead of us in multiple parts of this country because of hurricanes Helene and Milton in the Southeast last fall and the wildfires that hit Southern California early this month. There are tens of thousands of homes across Florida, North Carolina, and California that will need to [be] repaired or rebuilt entirely. That means more business for Builders FirstSource and its compadres…
Bottom line, once the macro backdrop is right, then Builders FirstSource and Home Depot stand to benefit… from both the persistent housing shortage and now the additional business that will come from the vast rebuilding efforts underway in multiple states impacted by natural disasters recently. So if you’re in the camp that expects lower rates, those are two terrific stocks to buy right now.”
Builders FirstSource (NYSE:BLDR) is a provider and producer of building materials and construction services throughout the United States. On February 24, Loop Capital reduced its price target BLDR from $205 to $190 while maintaining a Buy rating on the stock. The company posted a margin-driven beat, but its FY25 guidance came in below consensus expectations due to a stable outlook for single-family homes, according to the analyst’s research note.
Overall, Builders FirstSource (NYSE:BLDR) saw a high single-digit decline in sales for Q4 compared to the previous year, with drops in both single-family and multi-family markets. However, despite the continued normalization of multi-family demand and heightened competition in distribution, the company’s gross margin exceeded expectations for the quarter, Loop Capital noted.
5. Citigroup Inc. (NYSE:C)
Average Price Target Upside: 30.57%
Number of Hedge Fund Holders: 101
In January, after Citigroup Inc. (NYSE:C) reported its earnings report, Cramer stated:
“Last week we finally got some positive action for the stock market in 2025 with the S&P 500 gaining nearly 3% and turning positive for the year. Cooler inflation data pushed down long-term interest rates and we got flooded with great earnings reports. So what performed best during last week’s rally? When you look at the top performers, there are really some interesting patterns here. Two of the big banks that reported strong quarters made the list. Both Goldman Sachs, which we own for the Charitable Trust, and Citigroup rallied 12%.”
Citigroup (NYSE:C) is a global financial services company that offers a wide range of financial products, including cash management, trading, and investment banking services. On March 2, Wells Fargo considered the Financial Times’ report on Citi’s near-miss money transfers as outdated, with no effect on the company’s future expenses, regulations, or strategy.
The report serves as a reminder of Citigroup’s (NYSE:C) “worst-in-class status,” according to the analyst’s note to investors. Wells Fargo believes this issue highlights that the challenges that led to Citi’s October 2020 consent order are far from being resolved. Nevertheless, the firm remains positive on the stock, maintaining an Overweight rating with a $110 price target and recommended buying on any weakness.
4. Adobe Inc. (NASDAQ:ADBE)
Average Price Target Upside: 30.95%
Number of Hedge Fund Holders: 117
Adobe Inc. (NASDAQ:ADBE) received bullish commentary from Cramer in January when he said:
“You know, Shantanu Narayen is so good. The product is like a Lamborghini versus the guys that it’s up against. I don’t think I wanna sell the stock down here. It generates too much cash. I know that it seems like a tough stock to own. I can’t sell at 21 times earnings.”
Adobe (NASDAQ:ADBE) is a leading software company recognized for its extensive portfolio, especially in digital media creation and document management. More recently, on March 7, Cramer acknowledged the negativity toward the stock but predicted that the company would deliver good results.
“The most important part of the week comes Wednesday after the close and that’s when Adobe reports. It’s got to break the spell of undeserved negativity surrounding its stock. I bet CEO Shantanu Narayen will deliver something that makes the stock worth owning into the print.”
On March 7, RBC Capital analyst Matthew Swanson cut the price target on ADBE from $590 to $550 and kept an Outperform rating on the stock ahead of its Q1 earnings. The firm expects “solid” results and attributes the stabilizing sentiment mainly to investor views on GenAI, which has become closely linked with concerns about competition, according to the analyst’s research note. RBC also noted that the revised price target reflects a contraction in peer multiples.
3. Ralph Lauren Corporation (NYSE:RL)
Average Price Target Upside: 33.26%
Number of Hedge Fund Holders: 43
Ralph Lauren Corporation (NYSE:RL) takes its place among the stocks that are on both Cramer’s and Wall Street’s radar. In January, Cramer said:
“Well, Ralph Lauren, first of all, great American, won the Medal of Freedom. But I’ll tell you what’s the power behind it, they’ve got tremendous design. It’s time-honored… You’ve got a winner there.”
Ralph Lauren (NYSE:RL) is a renowned designer, marketer, and distributor of a range of lifestyle products, such as clothing, home items, and accessories. On February 21, after meeting with management, JPMorgan increased its price target on RL stock from $285 to $342 while maintaining an Overweight rating on the stock. The firm believes the brand has not yet reached its peak.
2. Dutch Bros Inc. (NYSE:BROS)
Average Price Target Upside: 34.67%
Number of Hedge Fund Holders: 41
Dutch Bros Inc. (NYSE:BROS) operates and franchises drive-thru locations across the U.S. under various brands, including Dutch Bros Coffee and Dutch Bros Rebel. Discussing the CEO of the company in January, Cramer remarked, “I think Christine is doing a remarkable job at Dutch Bros. Yes, this stock is all the way up.”
On February 28, Stifel analyst Chris O’Cull increased the price target for Dutch Bros (NYSE:BROS) from $74 to $85 and maintained a Buy rating on the stock. The firm revised several models within the Restaurants and Franchising sector following the companies’ recent earnings reports and 10-K filings. For Dutch Bros, Stifel is adjusting its long-term unit growth projections to align with the current mid-teens growth rate.
On February 27, discussing the company, Cramer commented:
“The stock has had a big run. We had, by the way, just so you know, we had Christine Barone on. Ever since she’s come in, this stock has been a rocket ship. You know, look, now [it] is at 126 times earnings. I am a big believer in Dutch Bros, but I will tell you this, I do think that the Brothers Dutch stock could cool off a little bit before you need to start buying. And, and I would do that.”
1. Spotify Technology S.A. (NYSE:SPOT)
Average Price Target Upside: 34.47%
Number of Hedge Fund Holders: 101
Before Spotify Technology S.A. (NYSE:SPOT) reported its earnings in February, Cramer said on January 31:
“Alright, now we start the morning with PayPal and Spotify, both of which could have terrific numbers… Now Spotify is a classic beat-and-raise story. It tends to blow away the estimates. I love these subscription businesses, you know that, think Netflix, Amazon because of Prime, and Spotify’s always in the conversation.”
Spotify (NYSE:SPOT) provides audio streaming services through a subscription model, allowing users to enjoy a diverse range of music and podcasts. Cramer is not the only one who likes the company. On February 14, Morgan Stanley analyst Benjamin Swinburne reaffirmed his Buy rating on SPOT stock and set a price target of $670.00. The stock has received a consensus Buy rating from 40 analysts with an average price target of $715.49, as of March 7.
More recently, in February, Cramer said “Uh, I loved the Spotify quarter but they got clipped”.
While we acknowledge the potential of Spotify Technology S.A. (NYSE:SPOT) 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 SPOT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
Hedge Fund Resource Center