The host of Mad Money, Jim Cramer, shared his insights on the persistent issue of inflation. He emphasized that companies need to lower their prices to entice consumers in today’s economic climate. Cramer pointed out the hesitation many companies exhibit in reducing prices.
Cramer said:
“Companies are so reluctant to take prices down because they don’t want to hurt their treasured gross margins but I think it may be time for a giant reset.”
While prices may have stabilized and no longer surged as they once did, Cramer warned that this does not imply they are decreasing. He believes many companies are failing to recognize the necessity for price rollbacks.
He gave a few examples from the liquor industry, where some producers have said that declining sales shifts are because of consumer preferences toward healthier lifestyles rather than acknowledging high prices.
Cramer went on to say:
“Funny enough, if you keep prices low, you can indeed make it up in volume because the consumer is a lot smarter than some of these companies are ever willing to admit.”
Cramer mentioned that both consumers and Wall Street are responding positively to companies that have opted for discounts or price reductions. He talked about the decision by McDonald’s to extend its $5 value meal, which has successfully attracted lower-income customers, and it led to an increase in its stock value.
Cramer mentioned that giants like Amazon, Costco, and Walmart have seen substantial stock gains this year. Cramer believes that businesses willing to reduce prices can compensate for their margins through increased sales volume.
Cramer speculated:
“I think we’ll look back on 2024 as the year when consumers took matters in their own hands and actually said no to inflated prices.”
He warned that companies that fail to adapt may face dire consequences, including leadership changes and plummeting stock prices. Talking about the consequences, he said:
“The result? Fired CEOs and crushed stock prices for all those who refused to heed the thunder, the thunder of those angry consumers who finally just said no to the scourge of inflation.”
10 Stocks From Jim Cramer’s Lightning Round
Our Methodology
For this article, we compiled a list of 10 stocks that Jim Cramer talked about during the lightning rounds of his Mad Money episodes on October 1 and 2. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 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).
Jim Cramer’s Latest Lightning Round: 10 Stocks to Watch
10. NANO Nuclear Energy Inc. (NASDAQ:NNE)
Number of Hedge Fund Holders: 2
NANO Nuclear Energy Inc. (NASDAQ:NNE) is focused on advancing microreactor technology, with key projects that include the development of two reactors, ZEUS, a solid-core battery reactor, and ODIN, which utilizes a low-pressure coolant system.
In addition to its reactor initiatives, the company is establishing a high-assay low-enriched uranium fabrication facility, aimed at supplying fuel for the nuclear reactor sector. The facility will also support fuel transportation and provide consulting services in the nuclear domain.
When asked about the company, Cramer said “I am aware of it. Let’s just be honest… That company loses a lot of money”.
Currently, NANO Nuclear Energy (NASDAQ:NNE) is facing scrutiny due to allegations of securities fraud, especially related to claims of misleading investors. A lawsuit has been filed against the company and its executives. It claims that the company has committed violations of the Securities Exchange Act of 1934.
The lawsuit says that misleading statements were made regarding the company’s progress in securing regulatory approvals for its microreactor technology and the fuel fabrication plant. It further alleges that timelines presented for commercialization were not only overly optimistic but also possibly unachievable. Concerns have also been raised about the company’s overall financial health and growth potential, suggesting that these were overstated in communications with investors.
9. SiTime Corporation (NASDAQ:SITM)
Number of Hedge Fund Holders: 18
SiTime Corporation (NASDAQ:SITM) is engaged in designing, developing, and marketing silicon timing solutions. It offers its products across various global markets, including Taiwan, Hong Kong, the United States, Singapore, and internationally.
The company’s product portfolio includes resonators, clock integrated circuits, and a range of oscillators, which cater to various sectors such as communications, data centers, automotive, industrial applications, the Internet of Things (IoT), mobile technology, consumer electronics, and aerospace and defense.
When asked about the company during the lightning round, Cramer said “Just hold it…Let’s hold on to it, it’s a good story”.
SiTime’s (NASDAQ:SITM) timing solutions are integral to emerging technologies, addressing the needs of artificial intelligence, data centers, automated driving, IoT applications, and 5G networks.
Management has commented that the company is in the nascent stages of transforming the estimated $10 billion timing market, which signals significant potential for growth and innovation.
In the second quarter, it reported revenue of $43.9 million, which surpassed management’s guidance of $40 million to $42 million.
Additionally, both operating profit and earnings per share exceeded expectations. Additionally, every end market served by the company saw growth in the second quarter, with increases in both sequential and year-over-year metrics reaching double digits.
SiTime’s (NASDAQ:SITM) management forecasts that bookings for the latter half of 2024 appear strong. They expect continued sequential growth for both the third and fourth quarters. Geographically, revenue projections for 2024 signal strong performance across all major regions, with expectations for double-digit growth in revenues from Greater China, North America, and Europe.
Wasatch Global Investors stated the following regarding SiTime Corporation (NASDAQ:SITM) in its Q2 2024 investor letter:
“SiTime Corporation (NASDAQ:SITM) also contributed to strategy performance during the quarter. The company develops silicon-based timing components, which are superior to less-expensive quartz-based components. SiTime’s components have many applications in advanced computing. The stock was down early in the year when SiTime lowered earnings guidance based on temporarily weak consumer demand and bloated inventories. But we visited the company in Santa Clara, California, and came away from our visit even more optimistic that consumer demand could rebound. Additionally, we gained confidence in SiTime’s product differentiation and long-term competitive advantages over legacy quartz-based timing solutions. As a result, we bought more shares and increased our position size. During the second quarter, the stock was up based on exceptionally strong earnings and news that SiTime expects to see consistent demand from Apple, Inc. and other companies involved in the proliferation of AI.”
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