We recently published an article titled, Jim Cramer’s Best Performers List: Top 10 Picks. In this article, we are going to take a look at where Vistra Corp. (NYSE:VST) stands against other stocks in Jim Cramer’s best performers list.
During Mad Money’s episode on October 1, host Jim Cramer urged investors to remember the market’s strong performance over the past quarter, making note of the rising tensions in the Middle East, which led to a decline in major stock indices on Tuesday.
He pointed out that the landscape has shifted beyond just the major technology companies, and shed light on the top performers of the S&P 500. Cramer observed that the last three months have witnessed what he described as “the revenge of the little guy companies.” He said:
“When you look at the 10 best performers of the third quarter, we discover that this formerly narrow market has totally changed its stripes.”
Cramer emphasized that the current market rally is driven by companies that are often overlooked. He said:
“It is a remarkable list that represents a real broadening out of the winners. Some would say it’s a sign of where we’re headed. I might not go that far, but clearly, we need to start digging a lot deeper to find winners going forward.”
In his recent commentary, Cramer highlighted that the major winners of the third quarter were unexpectedly obscure, primarily comprising a group of ten stocks focused on power generation and interest rate cuts.
He pointed out that these stocks diverged from the well-known Magnificent Seven and traditional FAANG names, with an absence of fast-growing medical or cybersecurity companies, many of which have faced challenges recently.
Cramer suggested that investors look to the bottom of the S&P 500 for insights into market trends. He noted that Super Micro finished last for the quarter, plummeting 49%. It serves as a reminder that backing the wrong AI investment can lead to significant losses. Despite this, Cramer emphasized the need for the market to focus on new stocks for long-term growth rather than relying on past leaders.
Our Methodology
For this article, we compiled a list of 10 stocks that Jim Cramer mentioned during his episode of Mad Money on October 1. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 900 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Vistra Corp. (NYSE:VST): Cramer Says ‘Carbon-free Electricity Has Become One Of The Hottest Commodities’
Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 92
Vistra Corp. (NYSE:VST) operates as an electricity retail and power generation company. It provides electricity and natural gas services to residential, commercial, and industrial clients.
The company’s operations include a wide range of activities, including electricity generation, wholesale energy trading, commodity risk management, fuel production, and logistics management.
With a generation capacity of about 41,000 megawatts, it serves around 5 million customers through a diverse portfolio that includes natural gas, nuclear, coal, solar, and battery energy storage facilities. During his episode of Mad Money, Cramer said:
“We’ve seen this insatiable demand for clean energy for data centers and the hyperscalers that use them.”
Technology companies are seeking dependable energy sources that also align with climate commitments. The recent agreement between Constellation Energy and Microsoft to revive the Three Mile Island nuclear plant exemplifies this trend.
Good news for the company came in July. Vistra (NYSE:VST) received crucial regulatory approval to extend the operational lifespan of the Comanche Peak Nuclear Power Plant, allowing it to function until 2053, which adds an additional two decades to its initial licenses.
The facility comprises of two units and has a total capacity of 2,400 megawatts. Since its inception in 1990, Comanche Peak has successfully generated over 582 million megawatt-hours of clean, emission-free electricity.
Cramer went on to talk about the performance of the stock and said:
“Vistra was up 37.9% for the quarter. It’s now up 218% for the year, hard to imagine a boring old utility making that kind of move but carbon-free electricity has become one of the hottest commodities out there.”
Moreover, in 2024, Vistra (NYSE:VST) completed its acquisition of Energy Harbor, expanding its customer base by an additional 1 million retail clients. The transaction also contributed 4,000 megawatts of nuclear generation capacity to its portfolio, complementing the existing 36,702 megawatts at the end of 2023, which includes 2,400 megawatts from nuclear sources.
Fidelity Growth Strategies Fund stated the following regarding Vistra Corp. (NYSE:VST) in its Q2 2024 investor letter:
“An overweight stake in utility company Vistra Corp. (NYSE:VST) (+24%) was the top individual relative contributor. In Q1, the Texas-based independent power producer completed its acquisition of Ohio-based nuclear fleet operator Energy Harbor. The new Vistra, with its expanded geographic footprint, is in strong position to gain from the buildout of AI-capable data centers, which require enormous amounts of power to run. It is expected that local grids in the U.S. will need to invest heavily over the coming years to improve their power infrastructure and meet growing demand. In the nearer term, firms may choose to contract with independent power producers, like Vistra, rather than rely on the local provider.”
Overall, VST ranks 2nd on our list of Jim Cramer’s best performers. While we acknowledge the potential of VST 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 timeframe. If you are looking for an AI stock that is more promising than VST but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Read Next: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.
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