We recently published a list of 9 Stocks Jim Cramer Talked About. In this article, we are going to take a look at where The Home Depot, Inc. (NYSE:HD) stands against other stocks that Jim Cramer talked about.
Jim Cramer, the host of Mad Money, reflected on the uncertainty surrounding the year 2025, focusing on several macroeconomic questions that are top of mind for him. One of the important questions Cramer was the future movement of the 10-year Treasury yield.
Specifically, he wondered whether it would drop to 4%, climb to 5%, or simply stay where it is. According to Cramer, this is the most important question currently facing the market. He pointed out that ever since the Federal Reserve began cutting short-term rates in September 2024, an unusual dynamic has taken place.
From the moment the first rate cut occurred, long-term interest rates began to rise sharply, a trend Cramer found highly unconventional. Cramer posed the crucial question: will the yield continue to rise toward that 5% mark, or will it begin to fall again?
“As far as stocks are concerned, I think they’ll do well if the yield on the 10-year peaks out and go slower, even if it basically sits here between 4.5% and 4.6%, the market should do fine. However, if long rates keep climbing with the 10-year reaching 5%, well, it could be truly miserable for the stock market at least short term.”
READ ALSO: Jim Cramer Talked About These 11 Stocks Recently and 7 Stocks on Jim Cramer’s Radar
Another critical issue Cramer pondered was the state of the labor market. Despite signs of economic softening in recent months, unemployment remains exceptionally low, which is contributing to a strong overall labor market. According to Cramer, this is the reason many are hopeful for a “soft landing” after the Federal Reserve’s aggressive rate hikes in 2022 and 2023.
“So can the labor market stay strong this year? Right now, I’m betting it can. Remember the labor market was great during the first three years of the original Trump administration. We had 3.5% unemployment right before COVID hit and everything fell apart. Plus, if Trump pushes through mass deportations… it could cause a major labor shortage. If anything, we probably should be worrying about whether the labor market will get too tight, causing severe wage inflation.”
Our Methodology
For this article, we compiled a list of 9 stocks that were discussed by Jim Cramer during episodes of Mad Money aired on January 3rd and January 6th. We listed the stocks in ascending order of their hedge fund sentiment 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).
The Home Depot, Inc. (NYSE:HD)
Number of Hedge Fund Holders: 82
Cramer likes The Home Depot, Inc. (NYSE:HD) but acknowledged a potential head-and-shoulders pattern. However, Cramer saw it as an opportunity to buy the stock, despite the perceived risk.
“I like Home Depot. You know… Jeff Marks and I, we were going back and forth and back and forth. I wanted to pull the trigger and buy more. He reminds me, look, we already bought some at this area, but let me tell you something, got a head and shoulders pattern, people think’s gonna break down. I want to buy, buy, buy right into that alleged head and shoulders problem.”
The Home Depot, Inc. (NYSE:HD) offers a wide range of home improvement products, including building materials, décor, and lawn and garden items, along with installation services and tool rentals for various home projects.
Carillon Tower Advisers stated the following regarding The Home Depot, Inc. (NYSE:HD) in its Q3 2024 investor letter:
“While Home Depot, Inc.’s (NYSE:HD) recent reported earnings were somewhat tepid, the market seems to be pricing in an inversion of the company’s sales, driven by lower interest rates. Home Depot reported its seventh consecutive quarter of same-store sales declines, giving back substantial gains that it enjoyed during the pandemic. High mortgage rates have also put a damper on existing home sales. People typically spend the most on home repairs and improvements in years when they buy or sell houses, often conducting both transactions in the same year.”
Overall, HD ranks 1st on our list of stocks that Jim Cramer talked about. While we acknowledge the potential of HD 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 time frame. If you are looking for an AI stock that is more promising than HD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.