Jim Cramer, host of Mad Money, reviewed the S&P 500’s strongest and weakest performers in February on Monday.
After an eventful weekend, it seems pretty clear that March is going to be very different from the month of February, but before we can focus on the new world where we’re exchanging rockets with Iran, I want to go over where we were coming from because February was a rough month for the market. While the Dow Jones Industrial Average rallied slightly, up 0.2%, the S&P dropped 0.9%, and the Nasdaq plunged 3.4%.
READ ALSO: Jim Cramer’s Game Plan: 11 Stocks in Focus This Week and Jim Cramer Put These 16 Stocks Under the Microscope.
Commenting on the 10 biggest decliners in the S&P 500, Cramer said that they tell two important stories. First, he said, enterprise software and professional services companies have been hammered by fears of AI displacement. He called those concerns “somewhat reasonable,” though he added that it is still too early to draw conclusions. Second, he pointed to increasing strain in private credit. He noted that it happened because many firms in that space were overly eager to extend loans to software companies. He went on to say that private credit has now become a separate issue that troubles him even more.
Here’s the bottom line: When you look at the S&P’s top 10 biggest winners from last month, you find a lot of data center suppliers, some energy stocks, a little aerospace, and one med tech play… When you look at the last month’s biggest losers, you see a lot of worries about AI displacement, something we talk about a lot, something that’s even spread to the private credit space, simply because many of these firms have a ton of exposure to the enterprise software cohort that we’re also worried about. Will the losers keep losing? I think March will be very different from February unless peace breaks out with Iran. But if you’re hoping for a rebound from last month’s hardest hit stocks, I think it’s kind of, a little bit of bounce here and then, don’t hold your breath.
Our Methodology
For this article, we compiled a list of 17 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on March 2. We listed the stocks in the order that Cramer mentioned them.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
Jim Cramer’s Takes on These 17 S&P 500 Stocks
17. IQVIA Holdings Inc. (NYSE:IQV)
IQVIA Holdings Inc. (NYSE:IQV) is one of the S&P 500 stocks that Jim Cramer shared his take on. Cramer called it a “great business,” as he said:
Finally, the ninth-worst performing stock in the S&P 500 was IQVIA, down 22.3%. Now, this is a CRO, a contract research organization. Pharmaceutical companies hire these guys to run their clinical trials. Oh, what a great business. The CROs were all caught up in the AI displacement trade, unfairly, in my opinion. I just don’t see that happening at all. When IQVIA reported in early February, although, the company reported a solid beat, but also gave a weaker than expected full-year forecast.
Now, I know it doesn’t help that RFK Junior’s FDA is taking a skeptical approach toward new drugs, particularly orphan drugs, by the way. Overall, with expectations now reset, I am tempted to say that you’re probably getting a nice buying opportunity here. But this is another company where any potential buyers will be swimming upstream. I like the business very much. I just don’t know whether this is the right stock to play it.
IQVIA Holdings Inc. (NYSE:IQV) provides clinical research and data analytics to the healthcare and life sciences industries. The company assists pharmaceutical and biotech companies by managing clinical trials, providing laboratory services, and tracking sales and patient engagement.
16. Fox Corporation (NASDAQ:FOX)
Fox Corporation (NASDAQ:FOX) is one of the S&P 500 stocks that Jim Cramer shared his take on. Cramer called the company being one of the worst-performing stocks in the S&P 500 an “anomaly.” He said:
Next up, the eighth-worst-performing in the S&P last month was Fox. Now, this is an anomaly. It’s down 22.6%. Odd. Fox has been the best-performing traditional media company for a while now and reported a stellar quarter in early February, just a colossal earnings beat. But the stock sold off in response, and it’s been sinking lower ever since. I think the sellers might be worried about new competition, as Paramount won the bidding war for Warner Brothers Discovery. Whatever the reason, Fox now trades at just 12 times this year’s earnings estimates, and I think that’s pretty cheap, too cheap.
Fox Corporation (NASDAQ:FOX) produces and distributes news, sports, and entertainment content and manages a studio lot for film and television production. We recently covered Bank of America’s recent downgrade and price revision on the stock. You can read it here.
Hedge Fund Resource Center