We recently compiled a list of the 10 S&P 500 Stocks on Jim Cramer’s Radar. In this article, we are going to take a look at where United Airlines Holdings, Inc. (NASDAQ:UAL) stands against the other S&P 500 stocks.
Jim Cramer, host of Mad Money, recently discussed the current state of the market and also discussed both the leading and lagging stocks within the S&P 500. He posed an intriguing question: What if Trump’s tariffs are more negotiable than expected? Instead of a hard-line approach, Cramer suggested they could end up being more like a “steak knife” than a “meat axe,” meaning less harmful to trade and international relations.
READ ALSO Jim Cramer Discussed These 10 NASDAQ 100 Stocks Recently and 8 Stocks on Jim Cramer’s Radar
While a more reasonable tariff policy might not be ideal for global trade, it would be a positive development for stocks, particularly if it results in lower prices for American consumers or if multinational companies move their manufacturing to more favorable countries. Cramer emphasized that, for stockholders looking for growth, hopes should be placed on negotiable tariffs.
“If you own stocks and you want them higher, you have to hope for negotiable tariffs that could cause countries to lower prices to us or make multinational companies move their manufacturing base here to a more friendly country.”
Cramer also discussed the S&P 500’s performance this year, noting that, while it is clear which stocks have thrived in the Nasdaq, the winners and losers in the broader S&P 500 have been more difficult to pinpoint.
Additionally, Cramer mentioned that several of the stocks in his Charitable Trust, which are reliant on a rebound in China, are ones he’s not excited about at the moment, especially considering the disappointing Chinese economic data. He mentioned that his dismay for such stocks will only last until “they annualize the crummy Chinese numbers and then they’ll probably bounce back.”
Our Methodology
For this article, we compiled a list of 10 stocks that were discussed by Jim Cramer during the episode of Mad Money on January 2. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock 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).
A bird’s eye view of a large commercial jetliner taking off from an airport runway.
United Airlines Holdings, Inc. (NASDAQ:UAL)
Number of Hedge Fund Holders: 54
Cramer said that United Airlines Holdings, Inc.’s (NASDAQ:UAL) transformation has been “astounding” though he advised to wait for a pullback before buying the stock.
“… Simply astounding, it’s United Airlines. For the first time in my life, I’ve seen a trade morph into an investment and that’s what United did. The stock’s up 135%… once the airline started removing capacity. United cut back 3% of its promised midyear capacity, I couldn’t believe it. Of course, I can’t explain the whole run.
Problem with Boeing, the production there kept some airlines from being, they were capacity constraints. They couldn’t get the planes they needed. Plus, the long on money short on time thesis that burst on the scene post-Covid never really quit. Oh, and get this, United still sells for less than eight times this year’s earnings. It can actually power higher. It might be a good buy. I would wait for a 5 to 8% pullback.”
United Airlines Holdings, Inc. (NASDAQ:UAL) is a leading provider of air transportation services, offering both passenger and cargo options. In 2024, it performed well, benefiting from industry-wide efforts to cut unprofitable capacity, especially in the summer. CEO Scott Kirby explained that the airline’s domestic capacity was planned with the expectation of industry-wide reductions in the fourth quarter of 2024, which led the airline to expand more slowly than its competitors during the first three quarters when capacity dynamics were less favorable.
Despite Boeing aircraft delivery delays, the airline adjusted by leasing planes and reducing its domestic supply as per Business Insider. Its strong hub structure and the arrival of hundreds of narrow-body aircraft helped it effectively manage these challenges, as noted by Clark Johns of Alton Aviation Consultancy.
Additionally, United Airlines Holdings, Inc. (NASDAQ:UAL) exposure to international markets provided another advantage in 2024. HSBC highlighted that the airline’s international market share significantly surpassed that of its competitors, and demand for international flights remained strong. Specifically, the airline’s transatlantic bookings for the winter of 2024, traditionally a slower period, were 30% higher than pre-COVID levels.
Overall UAL ranks 2nd on our list of the S&P 500 stocks on Jim Cramer’s radar. While we acknowledge the potential of UAL as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than UAL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
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