In this article, we discuss 10 inverse Jim Cramer stocks to buy today.
Jim Cramer is a former hedge fund manager and present host of Mad Money on CNBC who has become one of the most prominent personalities in the finance world due to a combination of prolific stock picking and over-the-top antics that seem to have earned him a cult following on social media. Retail traders, a growing market force in recent years, have not always seen eye to eye with Cramer, and have recently come up with an inverse index, the InverseCramer ETF, that tracks the performance of stocks that have earned bearish calls from Cramer.
According to Quiver Quant, the index has returned 2.36% to investors in the past month, growing at a compound annual growth rate of over 33%. The performance of the benchmark S&P 500 during the time is not much better, which has gained over 5% in the past four weeks, even with heavyweights like Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Alphabet Inc. (NASDAQ:GOOG) making a comeback given the improving economic indicators and brightening prospects of a soft landing by the Fed.
The value in tracking the performance of stocks that Jim Cramer gives bearish or bullish calls on lies in the influence that he has on social media. The equities he discusses on his show often see increased trading volumes the next day. Cramer generated an annual return of over 20% for a decade as a hedge fund manager. In the past few years, he has created a more successful business by delivering content for investors where his stock picks may or may not be successful. The InverseCramer ETF places additional burden on his daily calls on the show.
Our Methodology
These were picked keeping in mind the latest calls that Cramer made on these equities on his Mad Money show aired by news platform CNBC. The firms that Jim Cramer is bearish on but have strong growth prospects and positive ratings from analysts were selected for the list. An extensive database of around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2022 was used to identify the popularity of each stock among hedge funds.
Inverse Jim Cramer Stocks to Buy Today
10. AMMO, Inc. (NASDAQ:POWW)
Number of Hedge Fund Holders: 9
AMMO, Inc. (NASDAQ:POWW) makes and sells ammunition and ammunition component products for sports and recreational shooters. During the Lightning Round of his show on August 18, Cramer was bearish on the stock. Responding to a viewer question, Cramer said that he would not recommend any gun stocks because they “do not make anybody any money”. AMMO recently posted a more than 37% increase in revenue and also announced plans to separate the ammunition and marketplace businesses, a move that will improve margins.
On August 16, Lake Street analyst Mark Smith maintained a Buy rating on AMMO, Inc. (NASDAQ:POWW) stock and lowered the price target to $9 from $12, backing the firm to provide investors with strong growth opportunities in the coming months.
At the end of the second quarter of 2022, 9 hedge funds in the database of Insider Monkey held stakes worth $9 million in AMMO, Inc. (NASDAQ:POWW), the same as in the preceding quarter worth $15 million.
Just like Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Alphabet Inc. (NASDAQ:GOOG), AMMO, Inc. (NASDAQ:POWW) is one of the stocks on the radar of elite investors.
9. Lithium Americas Corp. (NYSE:LAC)
Number of Hedge Fund Holders: 9
Lithium Americas Corp. (NYSE:LAC) operates as a resource firm. Cramer was bearish on the stock during the Lighting Round of his show on August 10. In response to a viewer question about his views on the stock, Cramer stressed that he could not just recommend stocks that had been “perpetual money losers”. The stock has climbed in the past few days after Tesla owner Elon Musk called the lithium business a “license to print money”. The increasing production of EVs, which require lithium for batteries, is a key growth catalyst for the stock in the long run.
On July 6, investment advisory Deutsche Bank maintained a Buy rating on Lithium Americas Corp. (NYSE:LAC) stock and lowered the price target to $33 from $36. Analyst Corinne Blanchard issued the ratings update.
Among the hedge funds being tracked by Insider Monkey, Singapore-based investment firm Himension Capital is a leading shareholder in Lithium Americas Corp. (NYSE:LAC), with 3.3 million shares worth more than $66 million.
8. Indie Semiconductor, Inc. (NASDAQ:INDI)
Number of Hedge Fund Holders: 15
Indie Semiconductor, Inc. (NASDAQ:INDI) markets semiconductor products. The journalist investor has been bearish on the stock in the past few weeks, despite the fact that the firm has been making a lot of money as chip prices show no signs of slowing down despite improving supply chains. In June, Cramer said he knew about a lot of firms making a “ton of money” whose stock was “real cheap” as well. Indie has beaten market estimates on earnings consistently for the last few quarters and expects to cross the profitability barrier in 2023.
On July 20, investment advisory Deutsche Bank maintained a Buy rating on Indie Semiconductor, Inc. (NASDAQ:INDI) stock and lowered the price target to $10 from $11. Analyst Ross Seymore issued the ratings update.
At the end of the second quarter of 2022, 15 hedge funds in the database of Insider Monkey held stakes worth $65 million in Indie Semiconductor, Inc. (NASDAQ:INDI), compared to 17 the preceding quarter worth $56 million.
In its Q3 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Indie Semiconductor, Inc. (NASDAQ:INDI) was one of them. Here is what the fund said:
“Indie Semiconductor, Inc. (NASDAQ:INDI) is a fabless designer, developer, and marketer of automotive semiconductors for automated driver assistance systems, user experience, and electrification applications. Indie leverages its cross-domain semiconductor expertise in analog, processing and power chips to integrate multiple chips and capabilities into a single package and offer its customers lower cost products in a smaller form-factor. Indie Semiconductor, Inc. (NASDAQ:INDI) has strong market share in applications such as Apple CarPlay and ultrasonic parking assist with multiple contracts ramping in the coming quarters in applications such as advanced lighting controls, telematics, and electrification. The stock rose on increasing investor recognition of the longer-term opportunity for the company, especially in light of the current automotive semiconductor supply shortage. Semiconductor content in cars is expected to grow substantially over the coming decade as automated safety features and electrification penetrate an increasing percentage of vehicles.”
7. Allegiant Travel Company (NASDAQ:ALGT)
Number of Hedge Fund Holders: 25
Allegiant Travel Company (NASDAQ:ALGT) is a Nevada-based leisure travel company. The former hedge fund manager has been bearish on the stock in the past few weeks. In June, during the Lightning Round of his show, Cramer said he would rather be invested in established travel stocks like Expedia or Airbnb than Allegiant. Since then, the firm has posted a more than 33% year-on-year increase in revenue and guidance numbers look good as well due to strong bookings data despite industry pressures.
On August 10, Barclays analyst Brandon Oglenski maintained an Overweight rating on Allegiant Travel Company (NASDAQ:ALGT) stock and lowered the price target to $150 from $180, noting that the firm would benefit from continued price gains despite a slowing economy.
At the end of the second quarter of 2022, 25 hedge funds in the database of Insider Monkey held stakes worth $180 million in Allegiant Travel Company (NASDAQ:ALGT), compared to 24 in the previous quarter worth $230 million.
In its Q1 2022 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and Allegiant Travel Company (NASDAQ:ALGT) was one of them. Here is what the fund said:
“Shares of airline operator Allegiant Travel Company (NASDAQ:ALGT) came under pressure starting in Q4 from the rising omicron wave. Subsequently, share prices were further pressured by rising fuel prices driven, in part, by Russia’s invasion of Ukraine. We took the opportunity of near-term weakness to initiate an investment at what appeared to be an attractive discount to our estimate of intrinsic value. We believe Allegiant Travel Company (NASDAQ:ALGT) remains well positioned to benefit from pent-up demand. Leisure travel, where Allegiant is focused, has been recovering first, and Allegiant is differentiated by a more flexible route structure than peers.”
6. Dropbox, Inc. (NASDAQ:DBX)
Number of Hedge Fund Holders: 32
Dropbox, Inc. (NASDAQ:DBX) owns and runs a content collaboration platform. On August 9, during the Lighting Round of his show, Cramer was bearish on the stock, saying that “nothing happens to the stock” and he would “pass” on the option of buying a stake in the firm. Dropbox is one of the most popular file and storage firms on the internet and is priced at relatively cheaper levels compared to other cloud giants. The stock has only dropped 6% year-to-date, while peers in the sector shed as much as 30% or 40% in value.
In late May, Jefferies analyst Brent Thill maintained a Buy rating on Dropbox, Inc. (NASDAQ:DBX) stock and lowered the price target to $30 from $35, noting that the firm was facing macro headwinds along with the rest of the software sector.
At the end of the second quarter of 2022, 32 hedge funds in the database of Insider Monkey held stakes worth $751 million in Dropbox, Inc. (NASDAQ:DBX), compared to 44 in the preceding quarter worth $814 million.
In addition to Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Alphabet Inc. (NASDAQ:GOOG), Dropbox, Inc. (NASDAQ:DBX) is one of the stocks that hedge funds are monitoring amid increasing market volatility.
In its Q3 2021 investor letter, RGA Investment Advisors LLC, an asset management firm, highlighted a few stocks and Dropbox, Inc. (NASDAQ:DBX) was one of them. Here is what the fund said:
“Dropbox really let us down this quarter, not because they did anything wrong, but because during our entire tenure holding this stock, it outperformed in periods where long duration assets (aka higher growth) sold off. This time it did not. Despite people asserting this market bifurcation is about selling growth and buying value, Dropbox shares suffered one of their worst stock market quarters in recent years. It’s hard to identify a specific reason, though one story out there is how some investors thought the company could raise the bar on its 30% targeted operating margin upon achieving those levels. Along with the company’s earnings report, instead of raising the bar, they explained how there is more room to drive margin, but in the mean-time the preference at the company is for investing the potential excesses to drive further growth.
This year, the company will have repurchased nearly 9% of its diluted shares outstanding (perhaps more given the Q4 route in shares) and will have delivered a free cash flow yield upwards of 7.5% on its year-end stock price, while growing upwards of 12%. This is a potent recipe for outstanding returns, yet in a market that’s theoretically seeking cash flow, the stock was punished. We think this is one of the most nonsensical moves of them all and find Dropbox to be an especially compelling opportunity heading into 2022. The top line is certainly growing, as the company continues to withstand competition from Microsoft, Google and Box. Plus management continues to make smart tuck-in acquisition, showing what may emerge as a scalable, repeatable recipe for deepening their relationship with existing customers, thus driving down churn and setting the stage for prolonged ARPU growth. This potential strategy started with HelloSign, and is further validated with the acquisition of DocSend…” (Click here to see the full text)
5. Rivian Automotive, Inc. (NASDAQ:RIVN)
Number of Hedge Fund Holders: 35
Rivian Automotive, Inc. (NASDAQ:RIVN) develops and sells electric adventure vehicles. Jim Cramer has been bearish on the electric vehicles sector in general over the past few as recession fears gather pace and affect consumer spending power. On August 17, during the Lightning Round of his show, Cramer noted that he wanted viewers to sell the stock because it was “up too much”. Rivian is one of the firms poised to benefit from the recently passed climate bill that incentivizes EV production and ownership.
On July 18, Deutsche Bank analyst Emmanuel Rosner maintained a Buy rating on Rivian Automotive, Inc. (NASDAQ:RIVN) stock and lowered the price target to $46 from $69, backing the firm to maintain a solid outlook for the second half of 2022 despite a soft first half of the year.
At the end of the second quarter of 2022, 35 hedge funds in the database of Insider Monkey held stakes worth $1.5 billion in Rivian Automotive, Inc. (NASDAQ:RIVN), up from 29 in the previous quarter worth $3.9 billion.
In its Q4 2021 investor letter, Greenlight Capital, an asset management firm, highlighted a few stocks and Rivian Automotive, Inc. (NASDAQ:RIVN) was one of them. Here is what the fund said:
“We made a material gain in Rivian Automotive, Inc. (NASDAQ:RIVN) as a result of its IPO. We met RIVN’s sponsors in 2018 as part of our continued work on electric vehicles, and were favorably impressed by their technology and discipline. In mid-2020, we made a small investment at a $10 billion valuation. In November, Rivian Automotive, Inc. (NASDAQ:RIVN) went public at a $70 billion valuation and traded to a peak valuation of $162 billion. We hedged in the options market to lock in a minimum valuation of about $120 billion for a good chunk of our position. While we are believers in the company, we did not have material exposure at year end.”
4. Trane Technologies plc (NYSE:TT)
Number of Hedge Fund Holders: 38
Trane Technologies plc (NYSE:TT) is a building products firm based in Ireland. On August 16, during the Lighting Round of his show, the former Goldman Sachs employee underlined his bearish stance on the firm, advising his viewers to “get off this train” and asking them to invest in peers like Carrier instead. Trane stock is up over 18% in the past four weeks after the firm handsomely beat market estimates on earnings for the second quarter of 2022 and raised guidance numbers for the coming months.
On August 15, BMO Capital analyst Joel Tiss maintained a Buy rating on Trane Technologies plc (NYSE:TT) stock and raised the price target to $180 from $155, backing the firm to benefit from a greater push toward air-quality assessments and retrofits.
At the end of the second quarter of 2022, 38 hedge funds in the database of Insider Monkey held stakes worth $1.8 billion in Trane Technologies plc (NYSE:TT), the same as in the previous quarter worth $1.7 billion.
In its Q1 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Trane Technologies plc (NYSE:TT) was one of them. Here is what the fund said:
“Trane Technologies plc (NYSE:TT), another energy efficiency play in the industrials sector that should benefit from trends highlighted in the REPowerEU energy security plan, was a top detractor for the quarter, mainly due to continued supply chain headwinds raising costs. We think there is a strong secular tailwind for the cost and emissions savings Trane provides: the company makes products that help reduce energy consumption and emissions for residential and commercial HVAC and transport refrigeration, the minimization of food waste and other perishable goods and the increased productivity for Trane’s customers. Trane Technologies plc (NYSE:TT) estimates ~15%-25% of all greenhouse gas emissions in the world are emitted through HVAC systems and buildings.”
3. Enphase Energy, Inc. (NASDAQ:ENPH)
Number of Hedge Fund Holders: 53
Enphase Energy, Inc. (NASDAQ:ENPH) markets home energy solutions and has operations across the world. The former hedge fund manager has been bearish on Enphase in the past few weeks. In mid-June, Cramer underlined that the stock was too expensive and there were many “better stocks” in the sector to choose from. Since then, the stock is up more than 30% on the back of an earnings beat in the second quarter and the successful passage of the climate bill in the US Congress.
On August 11, KeyBanc analyst Sophie Karp maintained an Overweight rating on Enphase Energy, Inc. (NASDAQ:ENPH) stock and raised the price target to $363 from $230, noting the firm would benefit from the recently passed Inflation Reduction Act.
At the end of the second quarter of 2022, 53 hedge funds in the database of Insider Monkey held stakes worth $1.1 billion in Enphase Energy, Inc. (NASDAQ:ENPH), compared to 57 the preceding quarter worth $749 million.
In its Q1 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Enphase Energy, Inc. (NASDAQ:ENPH) was one of them. Here is what the fund said:
“Enphase Energy, Inc. (NASDAQ:ENPH) is a key solar holding that should be able to take advantage of greater incentives for solar installations in many geographies. The company was also a strong contributor for the quarter, overcoming pressures of a higher discount rate on their strong projected future earnings, raw material inflation and supply chain challenges as their long-term value was reaffirmed.”
2. Occidental Petroleum Corporation (NYSE:OXY)
Number of Hedge Fund Holders: 66
Occidental Petroleum Corporation (NYSE:OXY) is an integrated oil and gas firm. During the Lightning Round of his show on August 16, Cramer outlined his bearish outlook on Occidental. Responding to a viewer question, Cramer asked why people would invest in Occidental when they had options like Devon to choose from. Occidental shares have shot up by oer 129% in the past year. Compared to this, Devon shares are only up 50%. Legendary value investor Warren Buffett is one of the biggest bulls of the oil and gas firm.
On July 26, investment advisory Barclays maintained an Overweight rating on Occidental Petroleum Corporation (NYSE:OXY) stock and lowered the price target to $79 from $84. Analyst Jeanine Wai issued the ratings update.
At the end of the second quarter of 2022, 66 hedge funds in the database of Insider Monkey held stakes worth $13.7 billion in Occidental Petroleum Corporation (NYSE:OXY), compared to 67 the preceding quarter worth $12.6 billion.
In its Q2 2022 investor letter, Smead Capital Management, an asset management firm, highlighted a few stocks and Occidental Petroleum Corporation (NYSE:OXY) was one of them. Here is what the fund said:
“For the quarter, our best-performing stocks were Continental Resources (CLR), Merck (MRK) and Occidental Petroleum Corporation (NYSE:OXY). Despite a steep sell-off in June in the oil and gas stocks, two of our oil stocks made the quarterly list.
If you are wondering how we are outperforming the S&P 500 Index in the first half of the year, look no further than our top three performers. Occidental Petroleum Corporation (NYSE:OXY), Continental Resources (CLR) and Conoco Phillips (COP) soared in value and were barely represented in the S&P 500 Index. To quote Jerry Jones, owner of the Dallas Cowboys, “We are in the first quarter on higher energy prices!”
1. Warner Bros. Discovery, Inc. (NASDAQ:WBD)
Number of Hedge Fund Holders: 68
Warner Bros. Discovery, Inc. (NASDAQ:WBD) operates as a media firm. Cramer has been bearish on the stock recently. On August 18, during the Lightning Round of his show, Cramer compared the stock to the part of his garden that had rotten tomatoes. The merger of the firm with Discovery has brought a lot of debt transfer with it, but the company already has plans in place to increase cash flows in the long-term that will help with these payments. The firm is also growing in the streaming space.
On July 27, Evercore ISI analyst Vijay Jayant maintained an Outperform rating on Warner Bros. Discovery, Inc. (NASDAQ:WBD) stock and lowered the price target to $25 from $40, noting that the firm had a synergized growth story in the legacy media sector.
Among the hedge funds being tracked by Insider Monkey, New York-based firm Laurion Capital Management is a leading shareholder in Warner Bros. Discovery, Inc. (NASDAQ:WBD), with 13.5 million shares worth more than $338 million.
In its Q2 2022 investor letter, Smead Capital Management, an asset management firm, highlighted a few stocks and Warner Bros. Discovery, Inc. (NASDAQ:WBD) was one of them. Here is what the fund said:
“Leading the downside were stocks we own tied to any economic optimism. Warner Bros. Discovery, Inc. (NASDAQ:WBD) suffered selling from AT&T (T) shareholders disposing of it upon distribution of the shares in the merger. We have been too optimistic about how long it would take for these uninterested parties to sell. Macerich (MAC) suffered from fears of what a recession and higher interest rates would do to their business, disregarding the recovery in the Class “A” mall space since 2020.”
You can also take a peek at 12 Best Environmental Stocks to Invest In and 10 Best Nickel Stocks to Buy Now.
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Disclosure. None. 10 Inverse Jim Cramer Stocks to Buy Today is originally published on Insider Monkey.
