We recently published a list of 7 Stocks on Jim Cramer’s Radar. In this article, we are going to take a look at where Texas Roadhouse, Inc. (NASDAQ:TXRH) stands against other stocks that are on Jim Cramer’s radar.
Jim Cramer, host of Mad Money, took to the airwaves on Monday to offer his perspective on the recent market downturn and the S&P 500’s plunge into correction territory last week.
“Let’s establish what we’ve been through, a correction, that’s what we’ve been through. It’s a technical term, meaning a drop of more than 10%, which is what we had in the S&P 500 as of last Thursday.”
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Cramer expressed concern over comments made by Treasury Secretary Bessent, which he found troubling. Bessent, according to Cramer, suggested that corrections are generally healthy for the economy. However, Cramer noted that this correction feels different. He pointed out that most of the business leaders he has spoken with are genuinely concerned about a looming recession. Cramer emphasized that this correction is not caused by the usual factors, such as a change in the Federal Reserve’s stance or a market overreaction. Instead, he believes the primary issue is the fear of a recession triggered by the U.S. government.
Cramer further referenced Bessent’s comments about his 35 years of experience in the investment world, in which he claimed that corrections are normal, but excessive optimism in the market can lead to a financial crisis. Cramer found this viewpoint interesting but also noted that not all corrections are created equal.
“He’s talking like all corrections are the same. That couldn’t be further from the truth. Most corrections are not like the one that we have for the last few weeks. You can get a correction because the Fed changes its stance, the market got too exuberant, foreign problems have been exported to our shores, stuff like that but that’s not what we’re talking about here.”
Cramer highlighted the general public’s concern over the rising levels of government borrowing and the fear that it could lead to an unsustainable economic situation. He added:
“Here’s the bottom line: There doesn’t need to be a transition period of pain. There only needs to be some sort of certainty to the process. If we know what the president’s planning ahead of time and stopping our allies from abusing us, it makes much easier to make investing decisions for businesses and for you. We get that and then the correction’s over. But without it, the market will have a hard time staying positive and we’ll just be glad we had two days to catch our breath before the next beat down.”
Our Methodology
For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on March 17. We listed the stocks in ascending order of their hedge fund sentiment 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).
View of kitchen staff working together to deliver an extraordinary dining experience.
Texas Roadhouse, Inc. (NASDAQ:TXRH)
Number of Hedge Fund Holders: 52
Inquiring about Texas Roadhouse, Inc. (NASDAQ:TXRH), a caller asked how Cramer’s investing club chooses between the company and Cracker Barrel. Cramer replied:
“Very hard because Julie Masino, we’ve had her on the show, she is just crushing it at Cracker Barrel, crushing it. Texas Roadhouse, Mr. Morgan is doing a good job. Now, I know the stock doesn’t act well and I get that. We’re going to keep building a position as it goes down because they have a long-term history and I can’t believe the price-to-earnings multiple is as low as it is. But you’ve got two winners there.”
Texas Roadhouse (NASDAQ:TXRH) operates casual dining restaurants under various brands, including Texas Roadhouse, Bubba’s 33, and Jaggers, both directly and through franchises. In February, when a caller asked about Wendy’s, Cramer directed them to TXRH and said:
“Wendy’s? No. You’re gonna sell Wendy’s tomorrow and you’re going to buy Texas Roadhouse because that’s the one. We had them on Friday. They’re monster good. We bought it for the Charitable Trust. You’re buying, you’re buying TXRH tomorrow.”
Overall, TXRH ranks 4th on our list of stocks that are on Jim Cramer’s radar. While we acknowledge the potential of TXRH 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 TXRH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.