In this article, we will take a detailed look at the 10 stocks to buy according to Jim Cramer for long-term growth.
On his Friday show, Jim Cramer discussed the “tyranny of larger macro forces,” lamenting how the market has become overly fixated on broad economic indicators like interest rates and the Fed’s actions instead of keeping their eyes on the prize—great stocks with great stories.
The “short-term guessing game based on the data point of the day” can blindside investors to the long-term glory of what is in front of them, according to Cramer, who also expressed his disdain for ETFs by stating:
“..there could be a pickup in semiconductors if the economy accelerates so we buy an ETF that has semis rather than just going after Nvidia for AI or Texas Instruments for the Internet of Things.”
The backdrop to these comments was the U.S. stock market experiencing a significant rally following the release of encouraging jobless claims data. The S&P 500 jumped by 2.3%, reflecting widespread gains across multiple sectors. The Dow Jones Industrial Average surged by 683 points, highlighting strong performance among blue-chip stocks, while the NASDAQ Composite climbed 2.87%, driven by a rebound in technology and growth stocks.
This rebound helped the S&P 500 recover nearly all losses from earlier in the week, when recession fears and the unwinding of a global yen-funded carry trade led to a sharp decline.
Analyzing Jim Cramer’s recent “Mad Money” episodes, we made a list of 10 stocks that the veteran CNBC host is bullish on. These are companies that are well-poised for long-term growth, given that investors are able to hold their ground and “ignore the chatter.”
The reason we track what hedge funds are doing and their favorite stocks 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).
10. RadNet, Inc. (NASDAQ:RDNT)
Number of Hedge Fund Investors: 28
RadNet, Inc. (NASDAQ:RDNT) is a leading provider of outpatient diagnostic imaging services such as MRI, CT, PET/CT, and mammography. Cramer thinks the stock is “quite a good story”, and he’s not wrong given that it has jumped 62.44% in the last 6 months as of August 9.
Analysts point to RadNet’s expanding imaging center network as a growth driver, as well as its integration of AI technology to enhance diagnostic accuracy in cancer detection. Some headwinds around broader market volatility and competitive pressures within the healthcare sector do exist but nothing substantive enough to faze Jim Cramer from recommending RadNet, Inc. (NASDAQ:RDNT).
9. Zimmer Biomet Holdings, Inc. (NYSE:ZBH)
Number of Hedge Fund Investors: 41
Zimmer Biomet Holdings, Inc. (NYSE:ZBH), a medical device company, is a market leader in hip and knee replacements. The company’s strong innovation in orthopaedic solutions is expected to drive long-term growth, despite some near-term headwinds such as the impact of currency fluctuations on revenue.
Cramer holds that Zimmer Biomet Holdings, Inc. (NYSE:ZBH) offers great value for investors right now, stating that even though it “has some of the best tech you’ll ever find in the industry….this stock’s actually down 11% for the year.”
8. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Investors: 65
Cramer thinks that Costco Wholesale Corporation (NASDAQ:COST) stock is a “buy, buy, buy”.
The largest membership-only warehouse club chain in the country recently received an unchanged “Buy” rating from Goldman Sachs, with a price target of $585. The bank’s analysts took notice of Costco’s ability to maintain customer loyalty through its “membership” model, with a 7% year-over-year increase in membership fee income at $1.15 billion.
Costco Wholesale Corporation (NASDAQ:COST) is also in the midst of expanding its e-commerce division with sales growing 8.5% y/y.
7. Shopify Inc. (NYSE:SHOP)
Number of Hedge Fund Investors: 65
Cramer recently said he likes Shopify Inc. (NYSE:SHOP) “very very much” and that the company’s investments which might have seemed excessive earlier are now “paying off.”
In July, Goldman Sachs analyst Gabriela Borges upgraded the stock to “Buy” from “Neutral” with an increased price target of $74, noting that the company’s marketing investments are starting to bring in results that will drive revenue growth into the next year.
Shopify Inc. (NYSE:SHOP) disclosed revenue of $1.7 billion for the second quarter of 2024, showing a year-over-year increase of 31%. This is a result of the increasing adoption of e-commerce by businesses worldwide and the expansion of Shopify’s product offerings, further solidifying its position as a market leader.
6. The Charles Schwab Corporation (NYSE:SCHW)
Number of Hedge Fund Investors: 71
In response to a caller on the show, Cramer said that he would buy The Charles Schwab Corporation (NYSE:SCHW) stock and that he happens to “like Schwab very much…”
The financial services company has faced some short-term headwinds due to market volatility and interest rate concerns.
But Cramer holds that these issues are temporary and will not hamper the long-term growth prospects for The Charles Schwab Corporation (NYSE:SCHW). Goldman Sachs recently kept a “Buy” rating on the stock with a price target of $72. The bank cited Schwab’s consistent client growth and disciplined expense management as positive indicators.
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