In this article, we will look at the stocks on Jim Cramer’s Mad Money radar as he taught investors how to profit from the upcoming wave of takeovers. The host of CNBC’s Mad Money said on Tuesday that the market is on the verge of a fresh wave of takeovers and discussed why merger activity across several industries is likely to accelerate.
When we look at what’s behind much of this year’s gains, we often miss arguably the biggest driving force outside of tech and the data center. I’m talking about the takeover boom, $1.2 trillion in US M&A activity through the first five months of this year. Almost double what we saw in the same period last year. And it’s only going to get more heated because of a big change in the regulatory environment… I think we’re about to see a wave of takeovers in banks, pharmaceuticals, tech, oil and gas, retail, and telecommunications, something akin to the double deal activity we already saw in the first several months of the year, probably more.
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Cramer noted that the United States has thousands of banks and said he expects a broad wave of acquisitions throughout the sector. He also said that investors should maintain exposure because banks pursuing acquisitions could generate substantial gains through cost-cutting opportunities. Furthermore, he said large pharmaceutical companies are likely to acquire a wide range of biotechnology firms and added that major drugmakers could begin buying one another again. Discussing the energy sector, Cramer said recent regulatory appointments by the administration could open the door to a large number of transactions. He expects not only acquisitions in which the biggest oil companies purchase smaller rivals, but also mergers involving major industry players as they seek to streamline drilling operations and oil services and address shrinking reserves.
In retail, Cramer said consolidation opportunities, especially among grocery chains and hard goods retailers, will be difficult to ignore as Amazon continues to dominate the market. He added that competing retailers will need to combine if they want to remain relevant. He also pointed to Starlink as a potential catalyst for change, saying the company could force a reassessment of industries ranging from cable and satellite services to entertainment and telecommunications.
The bottom line: It won’t just be earnings driving stock prices higher in the second half of the year; it’ll be an extremely robust M&A pipeline. Takeovers are a terrific reason to stay long stocks, especially when the White House has very little interest in blocking these deals on antitrust grounds. Put these groups on your shopping list and prepare to buy them when the market takes one of its typical second-half swoons.
Our Methodology
For this article, we compiled a list of 21 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on June 30. We listed the stocks in the order that Cramer mentioned them.
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. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
21 Stocks on Jim Cramer’s Radar Like NVIDIA, Tesla and a Wave of Takeovers
21. Paychex, Inc. (NASDAQ:PAYX)
Paychex, Inc. (NASDAQ:PAYX) was among the stocks on Jim Cramer’s Mad Money radar as he taught investors how to profit from the upcoming wave of takeovers. Cramer discussed the company’s stock price movement and the reason behind it, as he stated:
Is it finally safe to circle back to some of the stocks that I think have been crushed by AI displacement worries? But while there are real victims of competition from artificial intelligence out there, a ton of proverbial babies got thrown out with the bathwater. Take Paychex, that’s America’s second largest payroll processor. It’s focused on small and medium-sized businesses, but it’s going large too, with a major outsourced human capital management division.
Here’s a stock that peaked at $161 a little over a year ago, plunging to $85 and change this April, rebounded to $98 as of today. While Paychex kept reporting solid numbers the whole time, Wall Street just didn’t seem to care. But after bottoming in April, the stock’s found its footing of late. Didn’t hurt that when Paychex reported last week, they delivered a good quarter with a strong full-year forecast.
Paychex, Inc. (NASDAQ:PAYX) provides human capital management solutions, including payroll processing, payroll tax and compliance, HR administration, benefits, and workforce management for small to mid-sized businesses.
20. GE Vernova Inc. (NYSE:GEV)
GE Vernova Inc. (NYSE:GEV) was among the stocks on Jim Cramer’s Mad Money radar as he taught investors how to profit from the upcoming wave of takeovers. Toward the end of the lightning round, when a caller inquired about the stock, Cramer remarked:
GE Vernova of those is my favorite. It’s one that the Charitable Trust has a very big position in. I believe in Scott Strazik. I think it is a terrific situation. Held up very well. I say still buy GE Vernova.
GE Vernova Inc. (NYSE:GEV) provides products and services for generating, converting, storing, and managing electricity, including gas, nuclear, hydro, and wind technologies. A caller inquired about the stock during the May 29 episode, and Cramer responded:
Look, I think GE Vernova is absolutely terrific. We know that the, it’s come down nicely from its top. It’s at a very good level. I still like NVIDIA very much. I’m not backing away from NVIDIA, I just need to know… what went on in the last hour, because it just seemed, let’s just say it didn’t seem right. How about that? Leave it at that.
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