Jim Cramer, host of Mad Money, recently discussed the impact of the previous President Joe Biden’s administration on the stock market and discussed the commonly raised question among business executives: Did the market perform because of the administration or despite it?
Cramer pointed to the Biden administration’s Inflation Reduction Act (IRA), which granted Medicare the authority to negotiate prices for certain expensive drugs. While this is expected to limit profits for major pharmaceutical companies, Cramer acknowledged that the high cost of drugs is a significant issue. However, he emphasized that Mad Money focuses on financial markets, not healthcare policy, and suggested that investors are looking for a government that takes a balanced approach to business. He added:
“Worse, at least if you’re a shareholder, you would’ve hoped that pharma and biotech CEOs actually sat down with the president for something, anything, just to explain why the drug companies don’t see themselves as the villains in our particularly expensive healthcare system but they didn’t talk to each other. Some of the CEOs believed the president just didn’t like the optics.”
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From an investor’s perspective, he suggested that the lack of communication left the pharmaceutical sector vulnerable, with drug stocks trading at low values due to the unpredictable nature of the administration’s stance.
Cramer also addressed the inconsistency in the Biden administration’s approach to the semiconductor industry. While he acknowledged the positive impact of the CHIPS and Science Act, which provided significant support for the sector, he criticized the unequal distribution of subsidies. Cramer specifically pointed to Intel, which received a large amount of funding, despite what he views as ongoing challenges within the company.
“The bottom line, if all that matters is who wins the next election, you could argue that this style didn’t work. That business might have been able to help bring down inflation, which is what I think undid the Democratic party in November. Business is not hated in this country. It doesn’t need to be loved, but something in between. Maybe everyone would’ve done better. Maybe that’s the put paid when it comes to business, the White House, and the closing stock prices of this administration.”
7 Stocks on Jim Cramer’s Radar
Our Methodology
For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during the episodes of Mad Money aired on January 16. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
7 Stocks on Jim Cramer’s Radar
7. MicroStrategy Incorporated (NASDAQ:MSTR)
Number of Hedge Fund Holders: 25
When a caller asked Cramer about MicroStrategy Incorporated (NASDAQ:MSTR), he remarked:
“Alright look, it’s a super, super hyped up version of Bitcoin. If you really love Bitcoin, be my guest. I happen to like Bitcoin. I’m not in love with it, so I don’t need to kind of double down which is what they offer. But look, by all means, if you love Bitcoin, you’re gonna really love that stuff.”
MicroStrategy (NASDAQ:MSTR) provides AI-driven enterprise analytics software and services, along with a range of consulting, support, and educational offerings. Cramer has maintained that instead of owning MSTR stock, he owns Bitcoin itself. In early January, he explained:
“As for the second-best performer, I honestly don’t know why this MicroStrategy is allowed to exist. I mean, really, here’s a company that’s making a leveraged bet on Bitcoin. That’s what it is, it’s an investment company. I think it should be regulated as one, not as a software company, but we’re in a world where nobody cares to hear about any crypto regulation whatsoever. Especially now that we’re about to have like a real crypto-friendly president and that’s how it advanced 359% last year and will probably go up again. Listen, I like Bitcoin. I own Bitcoin in part because I can’t own stocks. If you can own stocks and you believe in Bitcoin with all your heart and soul, then feel free to buy MicroStrategy. It’s Bitcoin on steroids but not that much more.”
6. Virtu Financial, Inc. (NASDAQ:VIRT)
Number of Hedge Fund Holders: 27
Cramer praised Virtu Financial, Inc. (NASDAQ:VIRT) and mentioned that the stock has been a “good buy” for a long time now.
“I think it’s a very inexpensive fintech company. They do a lot of execution, they have a lot of data. They’re a great market maker. They’re right over there and I think you should buy the stock. It has always been a good buy for as long as I can remember.”
Virtu Financial (NASDAQ:VIRT) is a financial services company that provides execution, liquidity, and analytics tools for trading across various asset classes, offering clients access to global markets and risk management solutions. Cramer has been a fan of the company for a long time now as is evident from the comment that he made in May 2021:
“I like it… Look, we know people from it. It’s a very good financial company. I think it should be selling at a higher price than it has. It has a very low price-to-earnings multiple. I’d be a buyer of it. I think you’re in good shape.”
Since the time he made the comment, the stock has been up around 30%.
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