We recently published a list of Jim Cramer’s Game Plan: 9 Stocks in Focus. In this article, we are going to take a look at where KB Home (NYSE:KBH) stands against other stocks that Jim Cramer discussed.
Jim Cramer, host of Mad Money, reviewed the most significant market events for this week on Friday, including earnings reports from various companies. He also pointed out that Wall Street’s anxiety is expected to persist as uncertainty over tariff policies continues.
“Looking forward to next week for a game plan, I’m focused on the unrelenting negativity and how it’s bringing about real but ignored values, ignored because it’s very hard to buy stocks ahead of the tariffs and a Fed that’s no longer willing to help by cutting interest rates, at least for the moment.”
READ ALSO: 9 Stocks on Jim Cramer’s Radar and Jim Cramer Discussed These 10 Stocks Recently
Cramer highlighted that on Thursday, pending home sales will be reported, which could offer a clearer picture of the housing market’s current state. He mentioned that while some companies are reporting troubling signs, it is important to assess whether these are isolated issues or part of a broader slowdown in the housing market.
The data could provide the much-needed clarity that the Federal Reserve cares about, especially since there is a lot of uncertainty surrounding the housing sector. In addition to the home sales data, Cramer pointed out that personal consumption expenditure (PCE) numbers will also be released on Thursday. He said that the PCE is the Federal Reserve’s preferred measure of inflation, but Cramer noted:
“Unfortunately, hasn’t been a good one. Sentiment … seems to be turning south.”
Although, he admitted that it is hard to say for certain. The global geopolitical concerns are contributing to this uncertainty, but Cramer stressed that hard data to support this shift in sentiment is still lacking. Cramer also mentioned that he is especially looking forward to the University of Michigan Consumer Sentiment Index, which is set to be released on Friday. The data could provide valuable insight into the public’s mood, and if the numbers are significantly negative, it would confirm the downtrend he has been seeing in the market over the past few weeks.
“So here’s the bottom line: There’s a lot going on next week, but until we get some resolution on the trade front, you need to expect more uncertainty, more volatility like we saw today. There’s just too much negativity, and for the moment it seems impossible to fight it. Although when it gets extreme for no reason as it did this morning, you still have to pounce if only for a trade.”
Our Methodology
For this article, we compiled a list of 9 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on March 21. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the fourth quarter of 2024, which was taken from Insider Monkey’s database of over 1,000 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
KB Home (NYSE:KBH)
Number of Hedge Fund Holders: 32
Mentioning that we should keep “an eye on what’s bad so we’re ready”, Cramer kicked off this week’s game plan by highlighting KB Home (NYSE:KBH), which reports earnings after the close on Monday.
“The home builder has inflation issues and has mortgage issues, right? Rates are too high. The stock’s down from just under $90 to around $60. So you could say those are now baked into the stock price but some investors thought the same way about Lennar, another national home builder. They reported an upside surprise on earnings but talked about how housing prices are going down albeit slowly, but that was certainly enough to kill that stock.
So I don’t see a bottom in KB Home, especially when it was trading at $42 in the fall of 2023. The stock’s had a relentless run. Time to bide your time, wait for a better moment. For the record, if you insist on owning a home builder, do you mind if you just go with Toll Brothers? I think that’s best of breed. Lennar did shake off more than half its losses by day’s end, closing at $115, that’s only down five. I saw it at one point down 12. Lurking behind all the negativity here is the likelihood, yes, of a recession, recession aided by stagflation.”
KB Home (NYSE:KBH) is a residential construction company that builds and sells a range of homes while also offering financial services such as insurance, title services, and mortgage banking.
Overall, KBH ranks 1st on our list of stocks that Jim Cramer discussed. While we acknowledge the potential of KBH as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than KBH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.
Hedge Fund Resource Center