In this article, we will take a look at the 12 stocks that Jim Cramer recommends selling.
Investors are in a wait-and-see more as we move forward towards the much-awaited policy decision on rate hikes by the Federal Reserve. Latest jobs report, which showed a continued slowdown of the labor market, increased investors’ hopes that the Federal Reserve will keep the rates unchanged. Latest data from CME Group as of September 1 showed that there was a 94% chance the Fed would keep rates unchanged this month. This was up from an 80% chance recorded in the week earlier.
JPMorgan economist Michael Feroli recently said in a note that the slowdown in the labor market and a “friendly” Job Openings and Labor Turnover Survey (JOLTS) should confirm that the Federal Reserve will make no changes to the current interest rates during its September meeting.
“The more interesting question will be whether the median dot continues to project one more hike this year. Either way, Fed leadership must be happy with a week that marked up odds for achieving a soft landing,” Feroli said.
Talking about soft landing, Jim Cramer has a unique and quite optimistic view on the overall market situation. Cramer recently said on Twitter that he sees a “slower glide” instead of soft or hard landing many economists are talking about. In a September 1 tweet, Cramer said:
“Once again the employment report shows that Jay Powell is aiming for a slow glide path NOT a hard or soft landing as the pundits keep talking about. How many times can they lead you astray?”
Commenting on latest inflation data, Cramer said last month:
“Core inflation numbers today indicate NOT a soft landing but a slower glide pattern that is in keeping with our view.”
Merrill on August 28 published its Capital Market Outlook report which has some interesting commentary on what to expect in the short-term. The report said that the August saw an overall slump in the market which is expected to continue. Merrill said that investors for now should remain neutral across equities and fixed income as “data continues to point to a mixed atmosphere even in a soft- landing scenario, our base case since the start of the year.”
“We maintain our preference for Value and high quality overall. Longer-term investors should consider small-capitalization shares, Emerging Markets and the Energy and Industrials sectors on their “add to exposures” list as we approach 2024.”
The report also said that the world is moving to high interest rates and high inflation. The pre-pandemic world of low interest rates and low inflation favored growth stocks which gained “at the expense” of value stocks, according to the report. But the institute now believes that era is over and the overall shift towards high interest rates would support value stocks. The bank also said that the possibility of rate cuts is getting pushed further down the line because the economy is continuously beating expectations. The report also noted that August and September are almost always slow when it comes to equities and this seasonal factor should be taken into account while assessing market returns.
“Near-term softness in the market may present opportunities for long-term investors to rebalance portfolios. And while rising yields tends to attract more negative attention, the repricing in the bond market is now offering investors the most attractive nominal and real yields in over a decade. Therefore, we prefer a slightly long-duration position, allowing us to take advantage of higher yields but leaving some room to move longer if rates substantially rise from here.”
Our Methodology
For this article, we saw several latest programs of Jim Cramer’s CNBC program “Mad Money” during which he talks about stocks and answers questions about different stocks. We picked stocks Cramer specifically recommended investors to sell or stay away from.
Jim Cramer Recommends Selling These 12 Stocks
12. Rocket Lab USA, Inc. (NASDAQ:RKLB)
Number of Hedge Fund Holders: N/A
In a Lightning Round episode last month, answering a question about Rocket Lab USA, Inc. (NASDAQ:RKLB), Jim Cramer said, “we like companies that make money,” and investing in Rocket Lab would be like “sending your money up in smoke.”
Rocket Lab USA, Inc. has been performing extremely well this year, though. Rocket Labs has gained about 63% year to date through September 5. Most of these gains came last month after the company launched a dedicated Electron mission for Capella Space. As of the end of the second quarter of 2023, 10 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Rocket Lab USA, Inc..
11. Icahn Enterprises L.P. (NASDAQ:IEP)
Number of Hedge Fund Holders: 2
Jim Cramer recently said in a program that he has “no idea how it makes its money” about Icahn Enterprises L.P. (NASDAQ:IEP). Cramer also called Icahn Enterprises L.P. “a mess” and recommended investors to stay away. Icahn Enterprises L.P. shares have fallen 60%. Led by Carl Icahn, the famous corporate raider, Icahn Enterprises L.P. is facing troubles after a report earlier this year from Hindenburg Research. The short report accused Icahn Enterprises L.P. of overstating asset values. Icahn Enterprises L.P. further plunged last month after the company said it would cut its quarterly distribution to $1 from $2. Icahn Enterprises L.P. also missed Q2 estimates on earnings and revenue.
As of the end of the second quarter of 2023, just two hedge funds in Insider Monkey’s database had stakes in Icahn Enterprises L.P..
10. TELUS Corporation (NYSE:TU)
Number of Hedge Fund Holders: 13
Last month, Jim Cramer in a Lightning Round episode called TELUS Corporation (NYSE:TU) a “loser” and said that there are several other players in the market doing the same thing. Cramer also said that TELUS Corporation is doing a “terrible job.”
A total of 13 hedge funds out of the 910 funds in Insider Monkey’s database of hedge funds had stakes in TELUS Corporation. The biggest stakeholder of TELUS Corporation during this period was Noam Gottesman’s GLG Partners which owns a $30 million stake in the company.
TELUS Corporation’s management in a latest earnings call talked about its cost savings plan:
“Restructuring costs are now anticipated to be up to $750 million for the full year, an increase of $475 million from our original assumption. As Darren highlighted, the annual cost savings from the incremental accelerated program are anticipated to be approximately $325 million for the full year and about 80% of that will be to the TTEC segment. Of the $325 million, we anticipate a small portion of the benefits to begin accruing in the back half of this year. Consistent with our capital plan, we anticipate approximately 85% of our annual capital expenditures of our $2.6 billion target to be in the first three quarters of the year, and we reaffirmed our $2.6 billion guidance for the year on CapEx. The expected decline in our capital program in Q4 is aligned with our seasonal build plan.”
9. QuantumScape Corporation (NYSE:QS)
Number of Hedge Fund Holders: 17
EV battery company QuantumScape Corporation (NYSE:QS) ranks 9th in our list of the stocks Jim Cramer recommends selling. Jim Cramer said a “hard pass” on QuantumScape Corporation in a program on CNBC and said “there’s nothing there” about the company. QuantumScape Corporation shares have lost about 27% over the past one year. In August QuantumScape Corporation priced an underwritten public offering of 37.5 million shares.
As of the end of the second quarter of 2023, 17 hedge funds tracked by Insider Monkey had stakes in QuantumScape Corporation.
8. Lucid Group, Inc. (NASDAQ:LCID)
Number of Hedge Fund Holders: 18
EV company Lucid Group, Inc. (NASDAQ:LCID) shares have lost about 56% in value over the past one year. Jim Cramer recommended investors to sell Lucid Group, Inc. a couple of months ago in a program on CNBC.
In August Lucid Group, Inc. posted second quarter results. GAAP EPS in the period came in at -$0.40 missing estimates by $0.04. Revenue in the quarter jumped 55.1% year over year to $150.87 million, missing estimates by $54.14 million.
As of the end of the second quarter of 2023, 18 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Lucid Group, Inc.. The biggest stakeholder of Lucid Group, Inc. during this period was
7. Plug Power, Inc. (NASDAQ:PLUG)
Number of Hedge Fund Holders: 20
Jim Cramer said in a Lightning Round episode a month ago that if Plug Power, Inc. (NASDAQ:PLUG) bounces the stock should be sold because the company has “disappointed” for so long.
As of the end of the second quarter of 2023, 20 hedge funds tracked by Insider Monkey had stakes in Plug Power, Inc.. The biggest stakeholder of Plug Power, Inc. during this period was Philippe Laffont’s Coatue Management which owns a $51 million stake in the company.
6. Coherent, Inc. (NASDAQ:COHR)
Number of Hedge Fund Holders: 28
Coherent, Inc. (NASDAQ:COHR) ranks 6th in our list of the stocks Jim Cramer is recommending to sell. In a recent program, Cramer said that Coherent, despite its strong products, “is not making money,” and Cramer said he is not recommending stocks that are not making money. Last month, Rosenblatt upgraded Coherent, Inc. to Buy from Neutral. The firm said that Coherent, Inc.’s selloff after the company’s weak FY’24 outlook was overdone.
As of the end of the second quarter of 2023, 28 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Coherent, Inc..
Giverny Capital made the following comment about Coherent Corp. in its Q1 2023 investor letter:
“I made small additions to our holdings in Eurofins Scientific and Coherent Corp. (NYSE:COHR) during the quarter. Both stocks were down a lot in 2022 and I feel both have excellent long-term prospects. We’ve generated a good absolute return over three years, though below my expectations relative to the S&P 500. We own an eclectic collection of high-quality companies, with a low level of debt across the portfolio and a high level of exposure to founder- or family-managed businesses.”
5. Rivian Automotive, Inc. (NASDAQ:RIVN)
Number of Hedge Fund Holders: 37
California-based EV company Rivian Automotive, Inc. (NASDAQ:RIVN) shares have gained about 34% year to date. Jim Cramer recommended investors to sell Rivian Automotive, Inc. about two months ago during a program on CNBC.
A total of 37 hedge funds in Insider Monkey’s database of hedge funds had stakes in Rivian Automotive, Inc. as of the end of the second quarter of 2023. The biggest stakeholder of Rivian Automotive, Inc. was Daniel Sundheim’s D1 Capital Partners which has a $231 million stake in the company.
Baron Fifth Avenue Growth Fund made the following comment about Rivian Automotive, Inc. in its second quarter 2023 investor letter:
“During the second quarter, we also added to our position in EV manufacturer Rivian Automotive, Inc. (NASDAQ:RIVN). After a complex period since the company’s IPO, in which Rivian tried to ramp multiple vehicles simultaneously while struggling to overcome unprecedented supply-chain bottlenecks, the company seems to have turned the corner. Production is now starting to scale up, which should help the company improve its plant utilization and subsequently help gross margins. The company is making notable progress in cost improvements by renegotiating with its suppliers, utilizing its larger scale to get better pricing, as well as, incorporating various technological advancements that would improve its cost structure while also improving the vehicles’ performance (for example it’s Enduro drive unit which is progressing ahead of plan).”
4. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Holders: 53
Jim Cramer in a program answered a question about Verizon Communications Inc. (NYSE:VZ) and said that we don’t buy stocks just because of their dividends if the stock prices are not going up. He said that Verizon Communications Inc.’s stock is “going nowhere.”
As of the end of the second quarter of 2023, 53 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Verizon Communications Inc.. The biggest stakeholder of Verizon Communications Inc. was Ric Dillon’s Diamond Hill Capital which owns a $250 million stake in the company.
The London Company Large Cap Strategy made the following comment about Verizon Communications Inc. in its second quarter 2023 investor letter:
“Exited: Verizon Communications Inc. (NYSE:VZ) Sale reflects heightened competitive activity from both AT&T and T-Mobile. While VZ has the highest quality network, we are concerned that competitors’ focus on market share gains could continue to negatively affect VZ’s business.”
3. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 56
Jim Cramer recently gave bearish comments about AT&T Inc. and called the stock “horrendous.” On the other hand, Citi recently upgraded AT&T to Buy. Citi said that several factors, including competition and industry structure, have affected the telecom industry. Legendary hedge fund manager Ray Dalio’s fund opened a new position in AT&T Inc. in the second quarter as it bought 1.98 million shares of the company.
A total of 56 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in AT&T Inc.. The biggest stakeholder of AT&T Inc. during this period was D E Shaw with a $226 million stake in the company.
2. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 88
Jim Cramer’s Trust sold its position in Johnson & Johnson recently. In a program on CNBC, Cramer explained in detail the reasons behind this decision. He said that Johnson & Johnson was not sold due to problems in fundamentals of this company. He praised Johnson & Johnson’s business but said the stake was sold due to consistent legal troubles. Cramer said that he had initially believed Johnson & Johnson had acted in good faith and was not aware of the harmful ingredients in its baby talc powder. But amid unending lawsuits and lost legal battles Cramer has decided to dump Johnson & Johnson.
1. Activision Blizzard, Inc. (NASDAQ:ATVI)
Number of Hedge Fund Holders: 134
Back in July Jim Cramer had advised investors to sell Activision Blizzard, Inc. (NASDAQ:ATVI) and instead buy Take-Two Interactive Software, Inc. (NASDAQ:TTWO) which he thought was “incredibly cheap.” Recently, CNBC’s David Faber said, citing people following the matter, said that Microsoft Corporation (NASDAQ:MSFT) may be able to complete its purchase of Activision Blizzard, Inc. in the first week of October as the company is expected to get regulatory approvals soon.
As of the end of the second quarter of 2023, 134 hedge funds tracked by Insider Monkey had stakes in Activision Blizzard, Inc..
Here is what Aristotle Value Equity has to say about Activision Blizzard, Inc. in its Q2 2023 investor letter:
“Headquartered in Santa Monica, California, Activision Blizzard is one of the largest video game companies in the world. The company develops and sells games that are played by nearly 400 million monthly active users across 190 countries. Activision Blizzard is a product of the 2008 merger of Activision, the console game maker, and Blizzard Entertainment, the PC game maker. In 2015, Activision Blizzard also acquired King Digital Entertainment, the developer of mobile games. The combined entities own some of the most well‐known franchises globally, including World of Warcraft, Call of Duty and Candy Crush. Together these three franchises account for roughly 80% of Activision Blizzard’s sales.
The company has successfully navigated multiple console cycles and, in recent years, has shifted its revenue mix away from physical sales toward more recurring sources. In 2013, roughly 70% of sales came from physical games, while today ~75% of sales come from subscriptions, in‐game content and advertising across mobile devices, consoles and PCs.
In early 2022, Microsoft—a current Value Equity holding—announced its intention to acquire Activision Blizzard. Our subsequent discussions with Sony, also a current holding, furthered our understanding that access to Activision Blizzard’s gaming franchises is critical for PlayStation, Xbox and the broader videogame industry. We do not attempt to predict regulatory approval of the transaction and instead view the company as an optimal investment regardless of whether the acquisition takes place…” (Click here to see the full text)
You can also take a peek at 15 Most Profitable Cutting Edge Technologies That Will Make You Rich and Dow 30 Stocks List: Ranked By Hedge Fund Bullishness Index.
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This article is originally published at Insider Monkey.
