In this article, we present the list of the 10 stocks that Jim Cramer recommends to sell.
Last week, Jim Cramer bemoaned the huge selloff that is rattling the sock markets since Russia attacked Ukraine. Cramer said that Russia is a nuclear power and given the “unhinged” behavior of Putin, the United States is abstaining from a strong reaction to avoid giving the Russian President a chance to use the nuclear weapons. Cramer has also been very active on his Twitter account lately. He tweeted that the market would have gained value on the back of the latest upbeat jobs report but the Ukraine situation kept hammering the stocks.
Markets are off to a bad start on Monday as well. S&P 500, Dow and Nasdaq fell over 1% at session lows in early trading as conflict in Ukraine rages on and oil hits new highs.
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Jim Cramer recently talked about several stocks in his CNBC program Mad Money, including American Airlines Group Inc (NASDAQ:AAL), salesforce.com, inc. (NYSE:CRM), Airbnb Inc (NASDAQ:ABNB) and AMC Entertainment Holdings Inc (NYSE:AMC). For this article we used the Mad Money stock screener and selected the stocks on which Cramer has a sell rating.
Jim Cramer Recommends Selling These 10 Stocks
10. Allbirds, Inc. (NASDAQ:BIRD)
Number of Hedge Fund Holders: 10
Jim Cramer has a Sell rating on Allbirds, Inc. (NASDAQ:BIRD) as of March 4. Allbirds, Inc. sells footwear and apparel. Cramer thinks that “too many naïve investors” started buying this stock “without any regard for the price simply because they liked the brand.” Cramer believes it’s hard to tell when the stock would be able to “find a floor.” Allbirds, Inc. stock fell as much as 9% last month even after it reported a strong earnings report. Allbirds, Inc. however expects its first-quarter revenue to come in the range of $60 million to $62 million versus the consensus estimate of $63.7 million.
In addition to Allbirds, Cramer also talked about American Airlines Group Inc, salesforce.com, inc. (NYSE:CRM), Airbnb Inc and AMC Entertainment Holdings Inc in his recent programs.
9. DigitalBridge Group, Inc. (NYSE:DBRG)
Number of Hedge Fund Holders: 30
DigitalBridge Group, Inc. (NYSE:DBRG) is a Florida-based private equity firm that invests in cell towers, data centers, fiber, small cells, and connectivity infrastructure. DigitalBridge Group, Inc. is down about 5% over the last 30 days. DigitalBridge Group, Inc. recently said that it entered into privately negotiated exchange agreements with certain noteholders of the issuer’s 5.75% Exchangeable Senior Notes due 2025 wherein noteholders have agreed to exchange about $60 million in principal amount of the outstanding 2025 Notes for a combination of shares of the DigitalBridge Group, Inc.‘s class A common stock and a fixed cash payment.
Jim Cramer is bearish on DigitalBridge. In his program on CNBC, Cramer said that he won’t back the tower business “in any way, shape or form.”
“There are too many of those,” Cramer said.
Clark Street Value, an investment management firm, published its fourth-quarter 2021 investor letter and mentioned DigitalBridge Group, Inc.. Here‘s what the fund said:
“With DigitalBridge (DBRG), there’s continued M&A in the digital infrastructure space and its seems like CEO Marc Ganzi can raise unlimited amounts of money at this point, so I’m content to just to go along for the ride.”
8. NIO Inc. (NYSE:NIO)
Number of Hedge Fund Holders: 30
Cramer has been bearish on NIO Inc. (NYSE:NIO) for quite some time now and the Mad Money stock screener shows that he still has a Sell rating on the Chinese EV stock as of March 1. Back in January, Cramer had said that he won’t be recommending “any of the Chinese stocks.”
“In particular, I don’t like that stock [NIO Inc.]. I just feel like there are people who want to speculate all the time on China. This is a different kind of China than what we’re used to. It is a communist country that does not seem to favor capitalist development anymore,” Cramer said about NIO Inc. and China.
NIO Inc. shareholders are indeed taking losses. Over the past six months, NIO Inc. shares have lost over half of their value. Insider Monkey’s data of 924 hedge funds as of the fourth quarter shows that 30 funds had stakes in the NIO Inc. as of the end of the first quarter.
7. Progress Software Corporation (NASDAQ:PRGS)
Number of Hedge Fund Holders: 17
Jim Cramer is bearish on Progress Software Corporation (NASDAQ:PRGS) because he believes that there are “so many” software companies out there.
“I just can’t own it unless you think you can get a takeover,” Cramer said in his program on CNBC.
In the fourth quarter, Massachusetts-based Progress Software Corporation posted an adjusted EPS of $0.92, beating the estimates by $0.18. Revenue in the period jumped 8.6% to reach $140.1 million, beating the Street’s outlook by $4.3 million.
Jim Simons’ Renaissance Technologies is one of the leading stakeholders of Progress Software Corporation as of the end of 2021. The fund has a $65 million stake in Progress Software Corporation. Overall, 17 hedge funds in our database had stakes in Progress Software as of the end of the fourth quarter.
6. Rent-A-Center, Inc. (NASDAQ:RCII)
Number of Hedge Fund Holders: 24
Rent-A-Center, Inc. (NASDAQ:RCII) is down 55% over the last six months. Jim Cramer has a Sell rating on the stock because Rent-A-Center, Inc. (NASDAQ:RCII) posted a weaker-than-expected fourth-quarter earnings report.
Cramer said on March 1 that Rent-A-Center, Inc. (NASDAQ:RCII) had a “terrible quarter.”
“I wish I could be more positive, but it was a very bad quarter,” said Cramer.
Rent-A-Center, Inc. (NASDAQ:RCII) expects Fy’22 revenue to come in between $4.45 billion to $4.60 billion versus the consensus estimate of $5.27 billion. Rent-A-Center, Inc. (NASDAQ:RCII) expects its EPS to fall between $4.50 to $5 versus the estimates of $7.04.
Rent-A-Center, Inc. (NASDAQ:RCII) also saw a decline in hedge fund sentiment of late. The stock was in 24 hedge fund portfolios at the end of the fourth quarter, compared to 28 funds in the previous quarter, according to the database of 924 funds tracked by Insider Monkey.
In addition to RCII, American Airlines Group Inc, salesforce.com, inc. (NYSE:CRM), Airbnb Inc and AMC Entertainment Holdings Inc are also on Cramer’s watchlist.
5. Okta, Inc. (NASDAQ:OKTA)
Number of Hedge Fund Holders: 52
Okta, Inc. (NASDAQ:OKTA) is another software stock Jim Cramer is bearish on. The identity and access management company posted a net loss of $29 million in the fiscal fourth quarter, compared to a $48 million net income in the same quarter last year. In January, Cramer had said that investors won’t be willing to buy Okta, Inc. on the back of the promising growth as currently, the market is moving away from growth stocks towards “tangible companies that make real things and generate real profits.”
Mad Money stock screener shows that Cramer has a Sell rating on Okta, Inc. as of March 3.
The market rotation towards value stocks is clearly reflected in hedge fund movements. As of the end of the fourth quarter, 52 funds had stakes in Okta, Inc., significantly down from 62 funds a quarter earlier.
4. Virgin Galactic Holdings, Inc. (NYSE:SPCE)
Number of Hedge Fund Holders: 24
Richard Branson’s Virgin Galactic Holdings, Inc. (NYSE:SPCE), once a darling of growth investors and Reddit’s WallStreetBets, has been taking a beating over the past few weeks. The stock is down a whopping 68% over the past six months. Jim Cramer said in the “lightning round” of his program that while he believes space is the ‘final frontier,” he doesn’t think Virgin Galactic Holdings, Inc. is an “investible frontier” as of now. Jim Cramer recommends selling Virgin Galactic Holdings, Inc. as of March 4.
3. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 70
Investors are watching AT&T Inc. as the company is set to host its investor and analyst day and give some key business updates. Jim Cramer said he will be listening to the call but remains skeptical. Cramer grilled the company in the following words:
“This is a company with uniquely terrible management — we’re talking ‘Wall of Shame’ bad — and I have no desire to touch it.”
On the other hand, Morgan Stanley’s Simon Flannery is bullish on AT&T Inc. stock as the analyst said the upcoming spin-off of its shares for the Warner Bros. Discovery deal will unlock value in communications.
Several elite hedge funds had stakes in AT&T Inc. as of the end of the fourth quarter. Some notable of these funds include DE Shaw, Ken Griffin’s Citadel, and Israel Englander’s Millennium Management.
Weitz Investment Management, an investment management firm, published its “Hickory Fund” fourth quarter 2021 investor letter and mentioned AT&T Inc.. Here‘s what the fund said:
“After several quarters of pandemic-induced outsized growth, new broadband connection growth has slowed for U.S. cable operators. This slower growth has coincided with a renewed push by competitors like Verizon and AT&T to offer high-speed data (either via wireless connects or by building new fiber-optic networks).”
2. Tilray, Inc. (NASDAQ:TLRY)
Number of Hedge Fund Holders: 20
Tilray, Inc. (NASDAQ:TLRY) is a US-based cannabis company whose stock is down about 60% over the past six months. Jim Cramer said the following about the cannabis industry and Tilray, Inc. stock:
“The pot industry is a very, very tough industry, not unlike gambling. So, I’m not there.”
Tilray, Inc. recently said it agreed to buy about $211 million of HEXO’s (HEXO.TO) debt. Canaccord Genuity upgraded both stocks on the back of the deal. According to the agreement, Tilray, Inc. will acquire more than $200 million worth of debt issued by Hexo (HEXO) with the right to convert them into nearly 37% of Hexo outstanding common shares at a conversion price of C$0.90.
At the end of the fourth quarter of 2021, 20 hedge funds had stakes in Tilray, Inc., compared to 16 funds in the previous quarter.
1. Trex Company, Inc. (NYSE:TREX)
Number of Hedge Fund Holders: 28
Trex Company, Inc. (NYSE:TREX) is a Virginia-based company that makes wood-alternative composite decking, railing, and other outdoor items made from recycled materials. The stock is down 32% over the last six months. Jim Cramer recently said that Trex Company, Inc. failed to perform in their earnings and that’s why he’d avoid the stock.
“… the earnings per share for the actual quarter was terrible. So the answer is ‘no thank you.’”
For the fourth quarter, Trex Company, Inc.’s EPS came in at $0.55, beating the estimates by $0.02. Revenue in the period jumped 33% to reach $304 million, beating the consensus by $1.36 million.
Hedge funds are also loading up on the stock. At the end of the fourth quarter, 28 funds had stakes in Trex Company, Inc., compared to 21 funds a quarter earlier. Charles Montanaro’s Montanaro Asset Management is a leading shareholder in the company with a $69.5 million stake.
Wasatch Global Investors, an investment management firm, published its “Wasatch Core Growth Fund” fourth quarter 2021 investor letter and mentioned Trex Company, Inc.. Here‘s what the fund said:
“Trex Co., Inc. (TREX) was also a large contributor. The company is a manufacturer and seller of high-performance, low-maintenance composite (non-wood) decking and accessories. Trex has continued to take market share from traditional suppliers of wood products, which have shorter lifespans and require more upkeep than composites. While the stock price can be volatile, the key factor for us is that the company has excellent prospects for intermediate- to long-term growth. In other words, we believe the Trex story is more about market-share dominance than about cyclical demand. Recently, the company reported strong growth in revenues, margins and earnings. Moreover, Trex has completed a major expansion of facilities to meet higher demand, and an even larger expansion has been announced. These expansions increase our confidence that the size of the market for composite products will grow significantly and that Trex will continue to take share for years on end.”
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This article is originally published at Insider Monkey.
