In this article, we discuss the 4 value stocks that Jim Cramer is warning about. If you want to read about some more value stocks that Jim Cramer is warning about, go directly to Jim Cramer is Warning About These 8 Value Stocks.
4. Toll Brothers, Inc. (NYSE:TOL)
Number of Hedge Fund Holders: 29
PE Ratio: 5.59
Toll Brothers, Inc. (NYSE:TOL) is a firm that develops and sells homes in luxury residential communities. On June 15, Jim Cramer placed the firm among a group of stocks with “insanely low price-to-earning multiples” that “cannot be bought under any circumstances”. Cramer warned that in light of the present market situation, these stocks looked cheap and investable but were not always “recession-proof”.
On June 21, Citi analyst Anthony Pettinari maintained a Neutral rating on Toll Brothers, Inc. (NYSE:TOL) stock and lowered the price target to $44 from $49, citing mortgage rates that are spiking and the deteriorating consumer confidence in the home building sector.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Greenhaven Associates is a leading shareholder in Toll Brothers, Inc. (NYSE:TOL), with 5.2 million shares worth more than $245 million.
3. Whirlpool Corporation (NYSE:WHR)
Number of Hedge Fund Holders: 33
PE Ratio: 6.01
Whirlpool Corporation (NYSE:WHR) makes and sells home appliances and related products. In mid-June, Cramer placed the firm among a group of stocks that investors should avoid even though their price-to-earnings multiples were fine. The journalist investor blamed the overall market situation as one of the primary reasons behind his advice. He said investors could justify owning some “higher quality” stocks if they were feeling “a little more sanguine about the economy”.
On April 20, JPMorgan analyst Michael Rehaut maintained an Overweight rating on Whirlpool Corporation (NYSE:WHR) stock and lowered the price target to $205 from $221, noting that analysts did not expect any material or sustained rebound in the building products this season.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Greenhaven Associates is a leading shareholder in Whirlpool Corporation (NYSE:WHR), with 2.8 million shares worth more than $489 million.
2. Cleveland-Cliffs Inc. (NYSE:CLF)
Number of Hedge Fund Holders: 48
PE Ratio: 2.32
Cleveland-Cliffs Inc. (NYSE:CLF) operates as a steel producer. During his show on June 15, Jim Cramer singled out the company as one of the “low price-to-earnings multiple” options that “investors should avoid completely”. Cramer predicted that the stock had even “more downside” to it than a group of other stocks with low PE Ratios. He said the stock could go “lower and lower”.
On May 31, Goldman Sachs analyst Emily Chieng maintained a Buy rating on Cleveland-Cliffs Inc. (NYSE:CLF) stock and lowered the price target to $27 from $36, noting that the stock would reflect “near-term demand headwinds” as seen during the last few steel cycles.
At the end of the first quarter of 2022, 48 hedge funds in the database of Insider Monkey held stakes worth $1.6 billion in Cleveland-Cliffs Inc. (NYSE:CLF), compared to 36 in the preceding quarter worth $952 million.
1. Ford Motor Company (NYSE:F)
Number of Hedge Fund Holders: 46
PE Ratio: 4.15
Ford Motor Company (NYSE:F) is an automobile manufacturer. In mid-June, Jim Cramer outlined his bearish outlook on the company. Cramer placed the firm among a basket of equities with low price-to-earnings multiples that only looked good if the economy was growing. The journalist-investor warned that when investors bought such a stock, with an “extremely low price to earnings multiple” and yet it still went down, it was because these stocks “only look cheap thanks to the fact that the earnings estimates are too high”.
On June 1, Goldman Sachs analyst Mark Delaney maintained a Neutral rating on Ford Motor Company (NYSE:F) stock and lowered the price target to $14 from $18, identifying supply chain problems as one of the main reasons behind the target decrease.
At the end of the first quarter of 2022, 46 hedge funds in the database of Insider Monkey held stakes worth $1.2 billion in Ford Motor Company (NYSE:F), compared to 53 the preceding quarter worth $1.7 billion.
In its Q1 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Ford Motor Company (NYSE:F) was one of them. Here is what the fund said:
“Ford Motor Company (NYSE:F) is another example of typical industrial manufacturing business executive mindsets. The April 18, 2022, Bloomberg Businessweek cover story features Ford CEO Jim Farley behind the wheel of an electrified Ford Motor Company (NYSE:F) F-150 Lightning. The article is titled, “Hey Elon, THIS is a truck.” I thought the article was terrific. One idea especially stood out to me. Since the F-150 is such a popular vehicle, it “argued for a gradual approach to electrification. Essentially the company retrofitted an existing F-150 with an electric powertrain rather than develop an entirely new truck.” No all-in financial and operation bet by this company on electrification.”
You can also take a peek at 10 Stocks Reddit’s WallStreetBets is Buying in July 2021 and Top Robinhood Stocks Popular on Reddit.
