In this article, we discuss the 5 stocks that jumped after Jim Cramer’s negative call. If you want to read about some more stocks that jumped after Jim Cramer’s negative call, go directly to 10 Stocks That Jumped After Jim Cramer’s Negative Call.
5. Bed Bath & Beyond Inc. (NASDAQ:BBBY)
Number of Hedge Fund Holders: 14
Percentage Increase in Share Price Over Past Month as of August 25: 105%
Bed Bath & Beyond Inc. (NASDAQ:BBBY) owns and runs a chain of retail stores. On August 17, Cramer made a bearish case for the shares of the retail firm in an appearance on CNBC. The former hedge fund manager said that people were in “heavy speculation” mode even as the two-year rates go up and that it was the “wrong time” to be on this bandwagon, pointing out that Bed Bath & Beyond Inc. (NASDAQ:BBBY) was “completely paralyzed” and the firm should be selling stock. He said the rally in the shares was reminiscent of the GameStop saga in 2021.
On August 16, Odeon Capital analyst Alexander Arnold downgraded Bed Bath & Beyond Inc. (NASDAQ:BBBY) stock to Sell from Hold with a price target of $7.50, noting that the shares of the firm were rising due to a meme-driven short squeeze.
At the end of the second quarter of 2022, 14 hedge funds in the database of Insider Monkey held stakes worth $23 million in Bed Bath & Beyond Inc. (NASDAQ:BBBY), compared to 15 in the previous quarter worth $69 million.
In its Q2 2022 investor letter, Miller Value Partners, an asset management firm, highlighted a few stocks and Bed Bath & Beyond Inc. (NASDAQ:BBBY) was one of them. Here is what the fund said:
“Bed Bath & Beyond 5.165% 08/2044 declined 67.4% in the period. Bed Bath & Beyond Inc. (NASDAQ:BBBY) reported 4Q21 sales of $2.05 billion, down 22% Y/Y, missing consensus of $2.08 billion. The company lost $0.92 per share in the quarter, down from 4Q20 adjusted EPS of $0.40, below analyst expectations for EPS of $0.03. Management noted supply chain disruptions and the Omicron variant led to inventory availability challenges, which had an estimated sales impact of $175 million, or 8.5% of 4Q21 net sales, and a 400 basis points (bps) Y/Y contraction in 4Q21 adjusted gross margin to 28.8%, driven by product cost increases and higher than anticipated freight and shipping costs. Additional headwinds in the quarter included general weakness in the retail segment, highlighted by big earnings misses from Walmart and Target, along with Moody’s downgrading Bed Bath’s corporate family rating from B1 to B2. The ratings agency cited increased execution risk of the company’s strategic turnaround initiatives and ongoing supply chain issues weighing on the company’s market share and profitability going forward as the main drivers for the downgrade. However, Moody’s maintained a stable outlook for the retailer due to the financial flexibility provided by the company’s liquidity position and low level of funded debt.”
