In this article, we discuss Jim Cramer’s latest predictions and 10 stock recommendations.
Investors have been worried about rampant inflation and the macroeconomic effects of the efforts of the central bank to tame it, leading to recession predictions and a panicked stock market. Jim Cramer, the former hedge fund manager and host of Mad Money on CNBC, has given his two cents on the matter, noting that in his experience, a market that was at odds with inflationary growth versus a recession may actually end up in the middle. He cautioned against taking investment decisions based on extreme views.
Cramer highlighted the three-day win streak of the S&P 500 and the NASDAQ Composite to back up his claims, saying there was “genuine confusion” in the market and investors were looking towards the Fed to bring not just commodity but wage inflation under control. He said it was important to do both before “the pain was over”. Cramer claimed that until this happened, investors could “go both ways”. The journalist investor also noted that the Fed meeting from June indicated a commitment to raise rates but nothing about a “big hike”.
The former hedge fund manager has also said that a lot of the market correction is related to the pandemic and the stocks which did very well during the crisis but are now tanking were “just returning to normalcy”. He gave examples of sectors such as streaming, video games, and fintech to drive his point home. Cramer said that “over-earning” was a problem in the market and responsible for much of the decline in these growth equities. Cramer said the sectors had “excellent companies” but needed rate cuts.
Some of the top stocks that Cramer has been monitoring in light of the developing situation include Meta Platforms, Inc. (NASDAQ:META), Applied Materials, Inc. (NASDAQ:AMAT), and Eli Lilly and Company (NYSE:LLY). During his show in early July, Cramer has also highlighted another problem – the declining use of the internet. He said that research from several firms had shown that internet use was declining this year, something “no one thought would happen”. Per the former hedge fund manager, this had hurt all internet-related stocks.
Cramer identified over-earning as just a “reversing”, pointing out that investors should turn away from panicked selling and instead focus on the “return to normal” that had opened up several buying opportunities in the market. Cramer acknowledged that the decline in the market could be related to a recession but it could equally correspond to speculators taking advantages of the supply shortages resulting from the Russian invasion of Ukraine. He pointed out that these shortages had failed to materialize, especially in the oil sector.
Our Methodology
These were picked keeping in mind the latest calls that Cramer made on these equities during his appearances on news platform CNBC. An extensive database of around 900 elite hedge funds tracked by Insider Monkey in the first quarter of 2022 was used to identify the popularity of each stock among hedge funds.
Jim Cramer’s Latest Predictions and Stock Recommendations
10. Medical Properties Trust, Inc. (NYSE:MPW)
Number of Hedge Fund Holders: 16
Medical Properties Trust, Inc. (NYSE:MPW) is a real estate investment trust that focuses on hospital facilities. Cramer was bullish on the stock during the Lightning Round of his show on June 15. In response to a viewer’s question about the company, Cramer underlined that he “liked” the company and thought “it was in a good situation”. Cramer also added that the company could “back the yield up” and that he believed that there was going to be a “slow and methodical rally of rising yields” as the Fed cooled down on the rate hikes.
On July 11, Truist analyst Michael Lewis maintained a Hold rating on Medical Properties Trust, Inc. stock and lowered the price target to $18 from $23, noting that despite macroeconomic factors, property values would hold up well.
Among the hedge funds being tracked by Insider Monkey, Wisconsin-based investment firm Cardinal Capital is a leading shareholder in Medical Properties Trust, Inc., with 5.1 million shares worth more than $108 million.
Just like Meta Platforms, Inc., Applied Materials, Inc., and Eli Lilly and Company, Medical Properties Trust, Inc. is one of the stocks on the radar of elite investors.
9. Nucor Corporation (NYSE:NUE)
Number of Hedge Fund Holders: 22
Nucor Corporation (NYSE:NUE) makes and sells steel products. During the Lightning Round of his show on July 6, the former hedge fund manager highlighted Nucor as one of the only steel stocks that he would recommend buying in the present economic environment in which steel prices were coming down. Cramer was outlining his overall views on the steel industry during a question about his thoughts on United States Steel Corp. He noted that there was too much “negativity around steel” and he would wait for prices to drop lower before buying.
On July 6, Morgan Stanley analyst Carlos De Alba maintained an Equal Weight rating on Nucor Corporation stock and lowered the price target to $121 from $144, noting that steel prices had fallen from record highs faster than expected in the past few months.
At the end of the first quarter of 2022, 22 hedge funds in the database of Insider Monkey held stakes worth $260 million in Nucor Corporation, compared to 26 in the preceding quarter worth $186 million.
In its Q3 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Nucor Corporation was one of them. Here is what the fund said:
“Our active approach also applies to being disciplined in managing positions in companies in more cyclical industries and taking profits during stronger periods of each cycle. We closed a position in steelmaker Nucor Corporation during the quarter after the shares had more than doubled over the last year as a direct participant in the recovery of the U.S. economy and rebound in industrial activity. At this point in the cycle, we no longer view the risk/reward as compelling and feel more confident in deploying the proceeds in more attractive areas discussed in this and previous letters.”
8. AMN Healthcare Services, Inc. (NYSE:AMN)
Number of Hedge Fund Holders: 25
AMN Healthcare Services, Inc. (NYSE:AMN) provides healthcare workforce solutions. In response to a viewer’s question about his thoughts on the company during the Lightning Round of his show on June 15, Cramer noted that he thought the firm was a “great stamping company”. Cramer also added that he thought it was “really the time for AMN” and there was a “great opportunity to buy” the stock in the present environment. AMN shares have climbed over 14% in the past twelve months.
On May 24, Jefferies analyst Brian Tanquilut maintained a Buy rating on AMN Healthcare Services, Inc. stock and raised the price target to $175 from $170, noting the shares had been “oversold on excessive fears around volume and rate normalization”.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Millennium Management is a leading shareholder in AMN Healthcare Services, Inc., with 890,147 shares worth more than $92 million.
7. Toll Brothers, Inc. (NYSE:TOL)
Number of Hedge Fund Holders: 29
Toll Brothers, Inc. (NYSE:TOL) is a firm that develops and sells homes in luxury residential communities. On July 6, Cramer discussed the stock during the Lightning Round of his show. He was responding to a question about his views on Skyline Champion Corp and advised viewers to buy Toll Brothers instead of Skyline. Previously in June, Cramer had noted that Toll Brothers was among a group of stocks that looked cheap and investable but were not always “recession-proof”.
On July 12, JPMorgan analyst Michael Rehaut maintained a Neutral rating on Toll Brothers, Inc. stock and lowered the price target to $48 from $53.50, noting that sector headwinds would persist for the housing sector in the near term.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Greenhaven Associates is a leading shareholder in Toll Brothers, Inc., with 5.2 million shares worth more than $245 million.
6. Whirlpool Corporation (NYSE:WHR)
Number of Hedge Fund Holders: 33
Whirlpool Corporation (NYSE:WHR) makes and sells home appliances and related products. On June 15, Cramer discussed the stock during his show and placed it among a basket of equities with “insanely low price-to-earnings multiples” that could be “great bets if the economy stays stable”. However, he also highlighted that these stocks were not recession proof and investors should keep this in mind “when taking the risk”.
On April 20, JPMorgan analyst Michael Rehaut maintained an Overweight rating on Whirlpool Corporation stock and lowered the price target to $205 from $221, noting that key investor concerns around the firm were likely to remain unresolved in the near term.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Greenhaven Associates is a leading shareholder in Whirlpool Corporation, with 2.8 million shares worth more than $489 million.
In addition to Meta Platforms, Inc., Applied Materials, Inc., and Eli Lilly and Company, Whirlpool Corporation is one of the stocks that hedge funds are buying.
5. Ford Motor Company (NYSE:F)
Number of Hedge Fund Holders: 46
Ford Motor Company (NYSE:F) is an automobile manufacturer. Cramer discussed the stock during an appearance on CNBC in early July, noting that he thought Jim Farley, the CEO of the firm, would “surprise” the upside. Cramer had previously been bearish on the stock but has since changed his position, saying that he was not altogether convinced why people thought Farley would not deliver on EV plans. He also added that supply chain issues were getting “better” and Ford had “tremendous order growth”.
On June 1, Goldman Sachs analyst Mark Delaney maintained a Neutral rating on Ford Motor Company stock and lowered the price target to $14 from $18, noting that global auto production would fall in the coming months compared to analyst estimates.
At the end of the first quarter of 2022, 46 hedge funds in the database of Insider Monkey held stakes worth $1.2 billion in Ford Motor Company, compared to 53 the preceding quarter worth $1.7 billion.
In its Q1 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Ford Motor Company was one of them. Here is what the fund said:
“Ford Motor Company is another example of typical industrial manufacturing business executive mindsets. The April 18, 2022, Bloomberg Businessweek cover story features Ford CEO Jim Farley behind the wheel of an electrified Ford Motor Company F-150 Lightning. The article is titled, “Hey Elon, THIS is a truck.” I thought the article was terrific. One idea especially stood out to me. Since the F-150 is such a popular vehicle, it “argued for a gradual approach to electrification. Essentially the company retrofitted an existing F-150 with an electric powertrain rather than develop an entirely new truck.” No all-in financial and operation bet by this company on electrification.”
4. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 53
Eli Lilly and Company develops and markets human pharmaceuticals. On June 15, Cramer said in response to a viewer question about drug firm Prothena that the Investing Club of CNBC, which he leads, is recommending and owns Eli Lilly stock. Cramer has backed drug giants to outperform the wider market even in a recession environment.
On July 8, Morgan Stanley analyst Terence Flynn maintained an Overweight rating on Eli Lilly and Company stock and raised the price target to $395 from $369, noting that biopharma revenues would remain “resilient” even if the economy slows down.
Among the hedge funds being tracked by Insider Monkey, Florida-based investment firm GQG Partners is a leading shareholder in Eli Lilly and Company, with 1.6 million shares worth more than $485 million.
In its Q1 2022 investor letter, Baron Funds highlighted a few stocks and Eli Lilly and Company was one of them. Here is what the fund said:
“Eli Lilly and Company is a global pharmaceutical company with a diverse offering primarily focused on therapeutics. Performance was strong mostly due to consistent financial growth powered by its core diabetes (and future obesity) franchise, as well as the constant drumbeat surrounding the Alzheimer’s therapeutic market, of which Eli Lilly and Company has one of the three potential winning blockbuster candidates in Donanemab. We retain conviction in Eli Lilly given the company’s strong long-term growth outlook.”
3. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 66
Cisco Systems, Inc. (NASDAQ:CSCO) provides internet-based networking and related products. The journalist investor has advised his viewers to make use of the buying opportunity created in the growth sector as a result of increasing interest rates, identifying Cisco Systems as one of the stocks that looks attractive based on the earnings guidance of the firm in the coming months and its solid dividend history.
On July 12, Rosenblatt analyst Mike Genovese initiated coverage of Cisco Systems, Inc. stock with a Neutral rating and a price target of $48, noting that the firm was losing market share in key tech areas.
At the end of the first quarter of 2022, 66 hedge funds in the database of Insider Monkey held stakes worth $1.7 billion in Cisco Systems, Inc., up from 57 in the previous quarter worth $3.4 billion.
In its Q1 2022 investor letter, Hayden Capital, an asset management firm, highlighted a few stocks and Cisco Systems, Inc. was one of them. Here is what the fund said:
“During the height of the tech bubble, Cisco’s stock peaked at ~$80 in March 2000, reaching up to a $500BN+ valuation (~26x Price / Sales, with ~17% operating margins or 156x operating profits). However, by the time it bottomed in September 2002, shares were trading at just ~$8.60 per share (~3.2x Price / Sales, ~21x operating profits). A little over a year later, the share price had doubled to ~$20, but then continued to trade around those levels in a range for the next 10 years.
So why were Amazon and Mercado Libre able to recover so quickly from their large drawdowns, while Cisco’s stock price remained anemic?
It seems the answer is in their differing growth profiles in the years afterwards. For example, Cisco Systems, Inc. revenues were $18.9BN in 2000, $22.3BN in 2001, $18.9BN in 2002, $18.9BN in 2003, and $22.0BN in 2004. By contrast, Amazon was able to grow its business by ~120% in the 3 years after the stock bottomed, and Mercado Libre grew by ~118% in the following 3 years. For Cisco Systems, Inc., it wasn’t until 2012 (11 years later) that revenues managed to double (to $46BN) from its original peak. Compare this to Amazon, who during those same 11 years, managed to grow its business 22x.”
2. Applied Materials, Inc. (NASDAQ:AMAT)
Number of Hedge Fund Holders: 74
Applied Materials, Inc. provides equipment, services, and software for the semiconductor industry. During the Lightning Round of his show on June 15, Cramer said in response to a question from a viewer that he liked AMAT stock “very, very much” and thought that it was a “great buy”.
On June 29, Bank of America analyst Vivek Arya maintained a Buy rating on Applied Materials, Inc. stock and lowered the price target to $118 from $135, noting that chip demand would be pressured in the coming months due to consumer weakness.
At the end of the first quarter of 2022, 74 hedge funds in the database of Insider Monkey held stakes worth $4.3 billion in Applied Materials, Inc., compared to 78 the preceding quarter worth $5.4 billion.
In its Q4 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and Applied Materials, Inc. was one of them. Here is what the fund said:
“Applied Materials, Inc., another material contributor for the quarter, provides materials engineering solutions for semiconductor fabrication equipment and manufacturing tools for advanced displays. Similar to Lam Research, Applied Materials, Inc. is executing well and continuing to experience the tailwinds from consolidation and growth within the industry.”
1. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 200
Meta Platforms, Inc. is a tech firm that owns and runs social media platforms. Cramer was bullish on the stock when asked about his views on the company during the Lightning Round of his show on June 15. Cramer said that he believes Meta was “the best metaverse stock” to invest in and that he thought that the company was going to be a “winner” in the space in the coming years.
On July 7, Tigress Financial analyst Ivan Feinseth maintained a Buy rating on Meta Platforms, Inc. stock with a price target of $466, noting that subscriber and revenue growth for the firm was driving a strong recovery in the shares.
At the end of the first quarter of 2022, 200 hedge funds in the database of Insider Monkey held stakes worth $19 billion in Meta Platforms, Inc., compared to 224 in the preceding quarter worth $31 billion.
In its Q4 2021 investor letter, Boyar Value Group, an asset management firm, highlighted a few stocks and Meta Platforms, Inc. was one of them. Here is what the fund said:
“Corporate executives can have many different reasons for selling shares (anticipation of tax law changes, philanthropy, diversification, and much more), but the sheer number of billionaire founders who sold shares in 2021 should raise eyebrows and might well be signaling a market top. Bloomberg’s Ben Steverman and Scott Carpenter report not only that Mark Zuckerberg of Meta Platforms, Inc. (formerly known as Facebook) sold shares in his company almost every day last year but also that the founders of Google sold ~$3.5 billion worth of stock (the first time either Sergey Brin or Larry Page has sold shares since 2017).”
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This article is originally published at Insider Monkey.
