In this article, we will look at Jim Cramer’s stock calls, as he discussed the rising market speculation. The host of CNBC’s Mad Money said Thursday that signs of excessive speculation are starting to creep back into the market.
Something is not right, and we gotta talk about it. Remember what happened last year when speculative stocks took over the market? They climbed, and they climbed, and they climbed ever higher, as complacency and over-enthusiasm took over the field. I called it the year of magical investing. I said, enjoy it while it lasts, because it’s going to end and end badly. Sure enough, in the middle of October, speculation peaked and the year of magical investing came crashing down. I bring that up because we’ve had a huge run here, a run that continued today.
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Cramer added that the same speculative names are once again driving gains, which he called unfortunate. He noted that the market has advanced very quickly in a short period, and repeated that prices have moved up too far, too fast. He explained that this kind of rally draws in people who become overly enthusiastic, as they assume anything they buy will keep rising simply because the market is going up.
They actually think they’re geniuses. They lost all discipline. They’re too cocky, same as last year. Cocky is not a positive trait when you’re buying stocks…. What did these people get excited about today? The exact same stuff that first made and then lost them tons of money last time: nuclear power, quantum computing, and space.
Our Methodology
For this article, we compiled a list of 21 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on April 16. We listed the stocks in the order that Cramer mentioned them.
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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
Jim Cramer’s 21 Stocks Calls: NVDA, AMD, and Speculation Warning
21. PepsiCo, Inc. (NASDAQ:PEP)
PepsiCo, Inc. (NASDAQ:PEP) was among Jim Cramer’s stock calls, as he discussed the rising market speculation. Cramer praised the company’s CEO, Ramon Laguarta, as he said:
This morning, PepsiCo’s Ramon Laguarta put on a clinic about how to grow earnings in a group that we’ve all, for the most part, given up on, consumer packaged goods… Let me walk you through the details here because I think it’s an important story. PepsiCo’s a complex company and doesn’t lend itself to easy analysis. There’s Frito-Lay, the snacking business. It’s the chief mover of the stock. Then there’s the beverages led by Pepsi, but also, of course, with the inclusion of Gatorade, which had a total facelift today. The company’s been challenged by a multitude of hardships… Some of these headwinds have dissipated. We’re seeing some behavior changes among people in GLP-1s…
The answer is smaller packages. That’s what Ramon figured out. A small… pack of chips with a good price is crushing it here. The price differential of a smaller bag has worked for more than just GLP-1 users. It seems like a great deal for consumers who are tired of inflation. Second, Ramon’s winning with innovation. The fast hydration system of Gatorade, faster to hydrate than water, was just introduced. I think it’s going to be a home run. There’s acquisitions like poppi, a more natural drink that’s doing quite well. The analysts seem a little clueless about these changes, though. Most are focused on how Ramon’s been able to control costs…. Having been through COVID, Ramon’s learned how to source from around the globe, and he is hedged on aluminum till the end of the year.
Plus, Pepsico’s scale allows them to crush on price the smaller players who can’t keep up with the sourcing, and they certainly aren’t hedged on aluminum till the end of the year. So Frito’s taken share, he’s confounding the analysts who are mostly focused on gross margins, not the bigger picture of PepsiCo’s business. They seem to be expecting the same shortfalls the other food companies gave them. Not with this one. What Ramon’s work shows is that you have to be inventive. You have to be willing to cut price, which he only did with the chips by the way, and you have to source from around the globe. Oh, and you need some luck, like the changing attitudes of consumers on the GLP-1s. That’s how you get a PepsiCo-style upsize surprise. At the end of the day, you should always look for wins wherever you can find them, whatever aisle they’re in. And there are plenty of wins outside of tech. The bank doesn’t asterisk that money; go make some of it.
PepsiCo, Inc. (NASDAQ:PEP) produces, markets, and distributes beverages and convenient foods, including snacks, cereals, dairy, and ready-to-drink products.
20. ARMOUR Residential REIT, Inc. (NYSE:ARR)
ARMOUR Residential REIT, Inc. (NYSE:ARR) was among Jim Cramer’s stock calls, as he discussed the rising market speculation. Toward the end of the lightning round, when a caller inquired about the stock, Cramer said:
I’ve known it for a long time. I don’t understand why the yield’s so high, and it does concern me. I know that higher rates don’t necessarily help it. I’ve never really been a big fan, but I can see that you would want to own it.
ARMOUR Residential REIT, Inc. (NYSE:ARR) manages a specialized portfolio focused on mortgage-backed securities issued or guaranteed by U.S. government entities. The company also holds a variety of government bonds and money market assets.
