In this article, we will look at Jim Cramer’s 5 Stocks Review: MSFT, AVGO, and Market Rotation. Please visit Jim Cramer’s 11 Stocks Review: HOOD, WFC, and Market Rotation, if you’d like to see the extended list and methodology behind it.
5. StoneX Group Inc. (NASDAQ:SNEX)
StoneX Group Inc. (NASDAQ:SNEX) was among the stocks Jim Cramer reviewed on Mad Money while discussing the recent market rotation. Cramer was bullish on the stock during the episode, as he stated:
For now… this is a very good business, but it’s not just a timing story where StoneX has benefited enormously from high interest rates and market volatility. These guys have been building this business for a long time. In its investor presentation, management says operating revenue has compounded at 31% annually since fiscal 2003. And book value has had a compound annual growth rate of 29%. These numbers are staggering… They’re no fluke either. They tell us that this is a real compounder, just one that happens to live in a part of the market most people don’t really care about. And… I know it seems boring but what are we in this business for? We’re in it to make money, okay? So, StoneX remains a market-sensitive business.
If the world comes down too much, interest rates fall a lot or some of these acquired businesses disappoint, the numbers can get less exciting. That’s one reason the stock stayed under the radar for so long. But it’s also why I think StoneX deserves its recent run. If you believe we’re entering a moment with more geopolitical friction, more commodity volatility, more cross-border complexity and more need for financial infrastructure outside the giant money center banks, well, then this one’s a winner.
Bottom line… I really like it. I think it’s one of the best businesses you’ve never heard of. But after running to all-time highs yesterday, it’s no longer as cheap as it was, obviously. This feels more like a very good company with a stock you should buy on weakness, not a stock you chase after a huge move. If the market gives you a pullback, you have my blessing to buy some StoneX. At these elevated levels, though, I say keep your bat on your shoulder, but get ready because on any sell-off, I think that you’ve gotta take a chance and you gotta do some [buy, buy, buy] of StoneX.
StoneX Group Inc. (NASDAQ:SNEX) provides financial services, including risk management, hedging, and trading for global markets. The company handles physical commodities, precious metals, and institutional fixed income and offers wealth management and payment solutions.
4. Constellation Brands, Inc. (NYSE:STZ)
Constellation Brands, Inc. (NYSE:STZ) was among the stocks Jim Cramer reviewed on Mad Money while discussing the recent market rotation. Cramer noted that he never thought he would “ever see Constellation Brands this cheap,” as he commented:
Constellation reported last Wednesday night, and on the surface, it was a silently mixed quarter… We’ve started seeing signs of stabilization in the broader alcohol space for once… When I see Constellation Brands roaring after a not-so-hot quarter, it tells me that Wall Street’s starting to believe in this group, too. Again, the overall numbers here, they weren’t really particularly strong… So why the heck did Constellation make such a huge comeback last Thursday? Let’s start with the quarter itself. Not only were the headline numbers better than feared, but we also spotted some green shoots in the all-important beer business… And I want to add that Constellation is now under new management…
Doesn’t hurt that the stock is just very cheap, trading at less than 14 times this year’s earnings estimates. Also pays a solid 2.5% dividend yield. I never thought I would ever see Constellation Brands this cheap. How about the broader alcohol business? Earlier this week, an analyst at UBS penned a very thoughtful note about their expectations for the industry. Long story short, UBS still predicts a structural volume decline over the next decade. I get that, but they’re betting that dollar sales will grow at a modest 1.3% pace in the US and higher than that worldwide as people increasingly swap to premium-priced merchandise. That’s a reasonable take, and while I wouldn’t call it rosy, let’s just say it’s a heck of a lot better than when we were hearing about the alcohol business six months ago.
Plus, it’s optimistic enough to make me think that a higher-quality operator can still do pretty well in this environment. Constellation is very high quality. Here’s the bottom line: I’ve been looking very slowly, very cautiously for a potential bottom in the alcohol business. And I keep seeing signs that the turn may already be upon us. That’s why Constellation Brands roared in response to a really lackluster quarter. I’m betting the buyers are right… Constellation may be the beer company worth owning.
Constellation Brands, Inc. (NYSE:STZ) sells beer, wine, and spirits, with beer brands such as Corona, Modelo, Pacifico, and Victoria. Its portfolio also includes wine and spirits labels such as Robert Mondavi Winery, Kim Crawford, The Prisoner Wine Company, and SVEDKA.
3. MP Materials Corp. (NYSE:MP)
MP Materials Corp. (NYSE:MP) was among the stocks Jim Cramer reviewed on Mad Money while discussing the recent market rotation. Mentioning that they think the stock is a “good buy,” a caller asked for Cramer’s opinion. He replied:
Alright, I like MP Materials. I know a lot of people feel it’s already run, but I’ve gotta tell you, they have the critical materials that we need, and it’s only worth $10 billion. That doesn’t make any sense to me. It’s got a bottom on it because the government basically gave you a bottom. I just say I want you, just hold on to it, okay?
MP Materials Corp. (NYSE:MP) produces rare earth materials and magnetic precursor products through its mining and processing operations. During the March 2 episode, a caller asked whether Cramer considers the stock speculative or sees long-term growth potential. He responded:
No, I think it does have long-term… in part because the president has pretty much just said, you know what, we’re not going to let this one go away. It’s too important to the country. Let’s not forget that.
2. Broadcom Inc. (NASDAQ:AVGO)
Broadcom Inc. (NASDAQ:AVGO) was among the stocks Jim Cramer reviewed on Mad Money while discussing the recent market rotation. Cramer highlighted the company’s partnership with Meta, as he remarked:
How about Meta, partnered with Broadcom to make tens of millions of custom chips that it desperately needs? You may think it’s fanciable to discuss a no-name company like Broadcom, but did you even realize that it’s actually bigger in market cap size than Meta? Can’t be. No, it is. After the stock’s 4.2% rally today, isn’t that incredible? I’m going to be sure of this because you never know with these things. But I have to tell you, this Meta is back, okay? But Broadcom is the one that I think you need to focus on. What a rally. Yeah, $1.8 trillion.
Broadcom Inc. (NASDAQ:AVGO) supplies semiconductor devices and infrastructure software, including networking, connectivity, and storage solutions. The company’s products are used for applications in data centers, telecommunications, broadband, smartphones, industrial systems, and AI networking.
1. Microsoft Corporation (NASDAQ:MSFT)
Microsoft Corporation (NASDAQ:MSFT) was among the stocks Jim Cramer reviewed on Mad Money while discussing the recent market rotation. Cramer mentioned the stock during the episode and said:
During this monster fall and rise, you get this pattern. Microsoft, did you see it? One of the largest companies on earth, it’s been drifting lower and lower and lower… If you look at Microsoft and you watch today, you’re going to say, “Well, what the heck happened?” And the answer is nothing. That’s what a rotation’s all about. There was no reason why it happened… Microsoft has stymied us for a long time. And I was prepared to wear the hair suit and say, “I don’t know what’s going on.” Bam, we get a great rally. And that’s what a rotation is all about. The idea that it’s going to be eviscerated by AI, maybe it’s off the table. Just as the leaders in the market cooled off, the laggards like Microsoft are going to come alive. This stock soared 4.6 today, and let me tell you, the move came out of nowhere. It shocked people because there was nothing to hang this rally’s hat on other than the fact that the company’s been spending some time with people to see if it can get its message out and hear the message of shareholders. It’s tremendously reassuring to hear Microsoft has a sense of urgency. They’re not happy where the stock is. They’re not happy where the company is. They acknowledge they’ve had missteps. They’re not the arrogant guys I thought they were. That’s good.
Microsoft Corporation (NASDAQ:MSFT) develops software, hardware, and cloud-based solutions. The company provides products like Windows, Azure, Office, LinkedIn, and Xbox.
While we acknowledge the potential of MSFT to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MSFT and that has 100x upside potential, check out our report about the cheapest AI stock.
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