Jim Cramer is Bearish on These 12 Stocks

Published on February 3, 2024 at 11:45 am by Fahad Saleem in Hedge Funds, News

In this article, we will take a detailed look at Jim Cramer is Bearish on These 12 Stocks. For a quick overview of such stocks, read our article Jim Cramer is Bearish on These 5 Stocks.

After recommending investors to go easy on mega-cap tech stocks and take some profits on them during the start of 2024, Jim Cramer is back to praising the strengths and resilience of these companies after major technology stocks part of the Magnificent Seven group started posting earnings. Cramer recently said in a program on CNBC that we have reached a strange “confluence of events” that makes it hard to “value anything.” Cramer praised strong earnings reports from Apple, Microsoft, Meta and Amazon. Cramer advised investors not to worry about high valuations of these companies and said it does not make sense to sell these stocks just because these companies are “big.” Cramer said these major technology companies have not “fooled” their way to such high valuations and there was nowhere else to go for these stocks “but up.”

Cramer’s Thoughts on Apple Inc (NASDAQ:AAPL)

Jim Cramer’s message to market skeptics who believe tech stocks are headed for a crash is this: “enough already!”

Cramer said Apple Inc (NASDAQ:AAPL), Amazon.com Inc (NASDAQ:AMZN) and Meta Platforms Inc (NASDAQ:META) generated about $330 billion in collective revenue and about $58.5 billion in collective profits in the recently reported quarter. Cramer said it would not make sense to compare these companies with those that collapsed during the dot com bubble

On a side note, Cramer shrugged off China fears and recommended investors to “own” Apple Inc (NASDAQ:AAPL) shares and not trade it.

Cramer Says Tesla Does Not Deserve to Be in the Magnificent Seven Group

Cramer yet again criticized the market’s fears around concentration of the broader stock market gains in a handful of companies also known as the Magnificent Seven group of stocks. Cramer said it does not make sense to worry about market gains of major companies and compare them to smaller companies. Cramer, however, was clear about Tesla as he believes the company no longer deserves to be in the Magnificent Seven group. Cramer said Tesla’s exit from the Mag. Seven group of stocks was made easier by the judge who recently rejected Elon Musk’s $56 billion pay package.

Despite this bullish outlook on tech stocks, there are some companies Jim Cramer is bearish on. In this article we decided to talk about those stocks.

For this article we saw several latest programs of Jim Cramer and picked 12 stocks he’s bearish on. For each stock we talked about the reason Jim Cramer gave for his bearish stance. We ranked these stocks based on ascending order of the number of hedge fund investors. Why? Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).

12. Invesco Mortgage Capital Inc (NYSE:IVR)

Number of Hedge Fund Investors: 7

Jim Cramer, when asked about Invesco Mortgage Capital Inc (NYSE:IVR) in a recent program, said he does not know “what mortgages they have” and therefore cannot recommend the stock.

“And I suggest you do not own it.”

Over the past one year Invesco Mortgage Capital Inc (NYSE:IVR) shares have declined by 41%.

As of the end of the third quarter of 2023, seven hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Invesco Mortgage Capital Inc (NYSE:IVR). The most notable hedge fund stakeholder of Invesco Mortgage Capital Inc (NYSE:IVR) during this period was Sander Gerber’s Hudson Bay Capital Management which owns a $4.3 million stake in Invesco Mortgage Capital Inc (NYSE:IVR).

11. Riot Platforms Inc (NASDAQ:RIOT)

Number of Hedge Fund Investors: 17

Jim said “I don’t trust it” when he was asked about Riot Platforms Inc (NASDAQ:RIOT) during his program on CNBC. Cramer said he just “checked in” with Larry Williams “again” and Williams said Bitcoin has not bottomed yet and you should “stay away.”

Last month, Riot Platforms Inc (NASDAQ:RIOT) said it produced 619 bitcoins in December 2023, down 9% on a year-over-year basis.

As of the end of the third quarter of 2023, 17 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Riot Platforms Inc (NASDAQ:RIOT)

10. AMC Entertainment Holdings Inc (NYSE:AMC)

Number of Hedge Fund Investors: 18

A few days ago a caller told Jim Cramer during a program on CNBC that “AMC Entertainment Holdings Inc (NYSE:AMC) has got me in a hole.” Cramer commented:

“You are not doing well at all.”

Cramer said that we “don’t want AMC Entertainment Holdings Inc (NYSE:AMC)” because the company is not “doing well.” Cramer said we want to own stocks that “go higher.”

“Let’s understand that consumers are not going to the movies like they used to.”

Cramer also pitched Netflix as a stock to buy instead of AMC Entertainment Holdings Inc (NYSE:AMC).

9. US Silica Holdings Inc (NYSE:SLCA)

Number of Hedge Fund Investors: 20

Jim Cramer’s reply was a resounding “No” when he was asked about US Silica Holdings Inc (NYSE:SLCA) during his program a few days ago.

Cramer said that you can’t own this stock in this state (New Jersey).

The stock has declined by about 12% over the past one year.

As of the end of the third quarter of 2023, 20 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in US Silica Holdings Inc (NYSE:SLCA). The most notable stakeholder of US Silica Holdings Inc (NYSE:SLCA) during this period was DE Shaw which owns a $9 million stake in US Silica Holdings Inc (NYSE:SLCA).

8. Chegg Inc (NYSE:CHGG)

Number of Hedge Fund Investors: 25

Education technology company Chegg Inc (NYSE:CHGG) ranks eighth in our list of the stocks Jim Cramer is bearish on.

“I think it’s an exploratory situation, but I cannot press the buy button,” Cramer said of Chegg Inc (NYSE:CHGG).

As of the end of the third quarter of 2023, 25 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Chegg Inc (NYSE:CHGG).

Cramer is bearish on Chegg but he’s recommending investors to buy and hold Apple Inc (NASDAQ:AAPL), Amazon.com Inc (NASDAQ:AMZN) and Meta Platforms Inc (NASDAQ:META).

7. Plug Power Inc (NASDAQ:PLUG)

Number of Hedge Fund Investors: 26

Jim Cramer is highly bearish on Plug Power Inc (NASDAQ:PLUG). In a latest program, while talking about a few renewable energy stocks, Cramer said:

“Plug Power? ….Grenade! Fire in the hole!”

In December 2023 Cramer had categorically said that he was pulling the plug on Plug Power Inc (NASDAQ:PLUG).

As of the end of the third quarter of 2023, 26 hedge funds tracked by Insider Monkey had stakes in Plug Power Inc (NASDAQ:PLUG).

6. Solaredge Technologies Inc (NASDAQ:SEDG)

Number of Hedge Fund Investors: 27

SolarEdge Technologies, Inc. (NASDAQ:SEDG) ranks sixth in our list of the stocks Jim Cramer is bearish on. Cramer said “no” when he was asked about the Israel-based solar technology company.

Cramer said the stock is too volatile as it “bounces four points and then it goes down again.”

Cramer said this stock is too hard to own.

Out of the 910 hedge funds tracked by Insider Monkey, 27 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in SolarEdge Technologies, Inc. (NASDAQ:SEDG).

Unlike Solaredge, Jim Cramer is bullish on Apple Inc (NASDAQ:AAPL), Amazon.com Inc (NASDAQ:AMZN) and Meta Platforms Inc (NASDAQ:META).

During its Q3 earnings call in November 2023, Solaredge management talked about guidance and business updates:

“We expect our annual non-GAAP tax rate for the entire 2023 to be within 22% to 24%. GAAP net loss for the third quarter was $61.2 million compared to a GAAP net income of $119.5 million in the previous quarter and GAAP net income of $24.7 million in the same quarter last year. Our non-GAAP net loss was $31 million compared to a non-GAAP net income of $157.4 million in the previous quarter, and a non-GAAP net income of $54.1 million in the same quarter last year. GAAP net diluted loss per share was $1.08 for the third quarter compared to a GAAP net diluted earnings per share of $2.03 in the previous quarter, and a GAAP net diluted earnings per share of $0.43 for the same quarter last year. Non-GAAP net diluted loss per share was $0.55 compared to a non-GAAP net diluted earnings per share of $2.62 in the previous quarter, and non-GAAP net diluted earnings per share of $0.91 in the same quarter last year.

As mentioned by Zvi, we expect that the stabilized solar revenue levels after the inventory correction has run its course will be approximately $600 million to $700 million quarterly. Under this scenario, corporate non-GAAP gross margins are targeted to be 30% to 32%, including approximately 500 basis points of benefits from IRA manufacturing tax credit and operating profit margins are targeted to be at 11% to 14% after implementing cost reduction activities. I reiterate that this scenario is based on no improvement in demand from our third quarter sell through levels and assumes no incremental revenues or margin from new products. Turning now to the balance sheet. As of September 30, 2023, cash, cash equivalents, bank deposits, restricted bank deposits and investments were $1.5 billion.”

Read the entire earnings call transcript here.

ClearBridge Select Strategy made the following comment about SolarEdge Technologies, Inc. (NASDAQ:SEDG) in its Q3 2023 investor letter:

“Solar energy technology companies SolarEdge Technologies, Inc. (NASDAQ:SEDG) and Shoals, meanwhile, saw headwinds from destocking in the U.S. and Europe. U.S. demand could slow further due to new net metering rules that reduce the value to consumers from sending excess residential solar energy back to the grid. SolarEdge, which makes inverters for solar systems as well as residential and commercial battery systems, is also facing rising battery competition in the U.S. from Tesla.”

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Disclosure. None. Jim Cramer is Bearish on These 12 Stocks was initially published on Insider Monkey.

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Published on May 1, 2024 at by Inan Dogan, PhD

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