In this article, we will take a detailed look at Jim Cramer’s Latest Portfolio: Top 9 Stocks to Buy and Sell.
Jim Cramer is exuberant about the Federal Reserve’s aggressive rate cut.
“Believe me, there are few things more friendly than a 50 basis point rate cut,” Cramer said in a recent program.
The CNBC host said that he has reminded his viewers repeatedly that when the Fed is your “enemy” you should stick to recession-proof stocks that can produce consistent earnings despite market slowdowns.
“Once the Fed is done tightening and we start seeing signs of impending rate cuts you need to load up on the cyclicals, the companies that see massive earnings growth when the economy accelerates,” Cramer reminded his viewers about his advice on how to play the interest-rate game.
Jim Cramer has been talking about all sorts of stocks during his latest programs. In this article we picked 9 important stocks he’s bearish/bullish on and analyzed these companies in detail. With each stock we have mentioned its hedge fund sentiment. 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).
9. Gentex Corp (NASDAQ:GNTX)
Number of Hedge Fund Investors: 26
Talking about Gentex Corp (NASDAQ:GNTX), Cramer said the stock will be negatively impacted because it’s related to the auto industry.
“I don’t see a quick turn. We will need several Fed rate cuts before they turn, I am sorry.”
Gentex Corp (NASDAQ:GNTX) makes automatic-dimming rear-view mirrors and camera-based driver assistance systems for cars.
8. Celsius Holdings, Inc. (NASDAQ:CELH)
Number of Hedge Fund Investors: 27
Jim Cramer said in a latest program on CNBC that something is wrong with Celsius Holdings, Inc. (NASDAQ:CELH).
“The stock was at $99, and now it’s at $34 and we have not word from John Fieldy (company CEO) other than everything is great. That’s no longer tolerable for me. I want to know what’s wrong.”
Celsius Holdings, Inc. (NASDAQ:CELH) is down 47% so far this year. The energy drinks company is facing headwinds amid rising U.S. CPI for nonalcoholic beverages, exacerbated by the company’s price hikes in 2021 and 2022. These increases were implemented to address supply chain challenges, but they’ve led to higher prices, contributing to a shift in consumer behavior. More customers are opting for grocery mass online purchasing instead of convenience stores because of high prices.
With a 12-pack of Celsius Holdings, Inc. (NASDAQ:CELH) priced at around $21—nearly three times that of Coca-Cola—it’s not surprising that premium pricing could dampen demand further. The company’s U.S. sales growth may continue to slow, especially when compared to its impressive pre-pandemic 2-year compound annual growth rate (CAGR) of 44.2% and pandemic 4-year CAGR of 104.6%.
On the upside, Celsius Holdings, Inc. (NASDAQ:CELH) posted strong bottom-line growth in Q2 2024, with gross profit margins improving to 52% and adjusted EBITDA margins at 24.9%. However, there’s uncertainty surrounding how sustainable these margins will be as the company plans to ramp up promotional spending and marketing investments in the second half of 2024, which could pressure profit margins in the near term.
Alger Small Cap Growth Fund stated the following regarding Celsius Holdings, Inc. (NASDAQ:CELH) in its Q2 2024 investor letter:
“Celsius Holdings, Inc. (NASDAQ:CELH) engages in the development, marketing, sale, and distribution of functional drinks and liquid supplements. It also offers post-workout functional energy drinks and protein bars. During the quarter, shares detracted from performance after the company reported fiscal first quarter revenues below analyst estimates. The revenue shortfall was attributed to ongoing inventory management challenges with PepsiCo, which decelerated year-over-year revenue growth from over 100% to approximately 37%. Despite the near-term growth slowdown, we believe Celsius remains well positioned to potentially capture market share within the large energy and soft drink industry over the long-term.”
7. Equity Residential (NYSE:EQR)
Number of Hedge Fund Investors: 30
Jim Cramer was asked about Equity Residential (NYSE:EQR) in a latest program. He called the stock a “total winner.”
“That is just an amazing stock.It still got about a 3% yield you can still make money in it.”
Cramer said a shortage of housing and apartment complexes could create a further runaway for this stock, which is already up 20% so far this year.
Equity Residential (NYSE:EQR) owns about 79,738 apartments across major U.S. cities like Boston, New York, and San Francisco. The REIT focuses on high-end tenants in urban areas, primarily managing mid-and high-rise apartments, along with a number of garden-style units.
Bank of America Securities recently downgraded the stock to Neutral from Buy on concerns that a softening U.S. labor market may negatively impact its portfolio. Equity Residential (NYSE:EQR) urban demographic is seen as more vulnerable to potential economic slowdowns.
Equity Residential (EQR) has seen a slowdown in its growth metrics over recent quarters. Same-store rental income increased from $697.8 million in Q2 2023 (a 5.5% year-over-year growth) to $718.2 million in Q2 2024, but the growth rate dropped to 2.9%. Similarly, same-store net operating income (NOI) growth decelerated from 5.6% in Q2 2023 to 3.0% in Q2 2024. Despite this, the REIT provided positive guidance, raising expectations for same-store rental income by 70 basis points and NOI by 145 basis points. Additionally, expense guidance was reduced by 100 basis points, situating expected NOI growth at 3.25%, slightly higher than the latest YoY growth.
Baron Real Estate Fund stated the following regarding Equity Residential (NYSE:EQR) in its Q2 2024 investor letter:
“In the second quarter, the shares of Equity Residential (NYSE:EQR), the largest U.S. multi-family REIT, appreciated due to continued strong operating updates, an improved full-year growth outlook, and faster-than-expected improvement in the company’s West Coast markets. Management has assembled an excellent portfolio of Class A apartment buildings located in high barrier-to-entry coastal markets with favorable long-term demographic trends and muted overall supply growth. Please see the “Top net purchases” for further thoughts on the company.
In the second quarter, we increased the Fund’s REIT exposure to best-in-class multi-family owners/operators Equity Residential and AvalonBay Communities, Inc. Our meetings with each management team supported our view that both companies are led by astute executives that are highly focused on driving value creation for shareholders…” (Click here to read the full text)
6. Moderna Inc (NASDAQ:MRNA)
Number of Hedge Fund Investors: 39
When asked about Moderna Inc (NASDAQ:MRNA) in a latest program, Cramer said:
“Moderna has been a big disappointment.”
Moderna Inc (NASDAQ:MRNA) has been getting tarnished amid downgrades from Wall Street. It was one of the most shorted stocks in August. Investors are looking for growth catalysts for the stock beyond COVID.
The company recently cut its R&D budget by $1.1 billion between 2024 and 2027. The cancellation of five pipeline programs also signaled reduced confidence in its COVID-19 vaccine revenue or the potential of the shelved projects.
Moderna Inc (NASDAQ:MRNA) late-stage pipeline also faces significant challenges. The combined flu-COVID vaccine, expected to be filed for FDA approval soon, is entering a competitive field. Novavax and Sanofi are developing a similar shot, with trials expected to yield results by mid-2025. Moderna’s RSV vaccine, approved for adults 60 and over, also faces competition from GSK’s Arexvy, which holds a first-mover advantage in a key demographic (ages 50-59).
The company’s mRNA vaccines are also expected to face headwinds amid a wider reluctance in the public. A recent survey showed that only 43% of Americans plan to get the updated COVID-19 vaccine this year. Concerns over side effects, such as myocarditis and Guillain-Barré syndrome, linked to mRNA vaccines, continue to affect vaccine uptake.
Moderna Inc (NASDAQ:MRNA) projected 2025 revenue is $2.5 billion to $3.5 billion, giving it a high forward price-to-sales ratio of 10.2 times, well above the industry average of 3.8 times.
5. Nextracker Inc. (NASDAQ:NXT)
Number of Hedge Fund Investors: 39
Jim Cramer was recently asked about First Solar. He instead pitched Nextracker Inc. (NXT).
“I know it’s been a big disappointment for Club members but you got to stick with Shugar (company CEO).”
Earlier this year, Jim Cramer had said the following about NXT:
“Their technology lets you increase your yield from solar panels. The stock is down. It’s a great opportunity.”
Wall Street is also growing bullish on Nextracker Inc. (NASDAQ:NXT). Earlier this year, Mizuho gave a $59 price target on the stock, saying Nextracker Inc. (NASDAQ:NXT) is positioned to benefit from the demand growth of solar power driven by data centers and AI.
Nextracker Inc. (NASDAQ:NXT) stands to benefit from the secular tailwinds in the industry. According to data from the U.S. Energy Information Administration, solar is expected to grow at a CAGR of 26% over the next five years.
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