雅虎香港財經 14 Stocks “About To Pop” According To Jim Cramer: In Retrospect
In this article we will discuss the 14 stocks Jim Cramer recommended back in October 2022, and how they have fared since then. If you want to explore similar stocks, you can also take a look at 5 Stocks "About To Pop" According To Jim Cramer: In Retrospect.
2022 was one of the worst years for the stock market due to high inflation and rising interest rates. In October 2022, Mad Money's Jim Cramer spotted 14 potential buying opportunities among 59 stocks that made new lows. Cramer said at the time that these 14 stocks were "about to pop". Let's see which one of these have actually popped since then, but before that, let's look at how Cramer feels about the market situation right now.
The Way to "Whip Inflation Now", According to Cramer
On March 28, Jim Cramer spoke about the current inflation situation and the Fed. Jim Cramer noted that that while the Fed wants to tame inflation, it does not want to go as far as causing further bank failures, and so the Fed decided to go with a quarter-point rate hike instead of a half-point rate hike due to the recent banking crisis. Jim Cramer thinks that the Fed needs to stop raising interest rates further, however, it cannot unless "wage inflation cools dramatically". According to Cramer, there are two ways that the Fed can "whip inflation now". One way is that the Fed keeps raising interest rates, causing wage stagnation and hurting the housing and automotive sectors along with the overall economy. The other riskier way to get wage inflation in control is to create "financial panic". Here are some comments from Jim Cramer:
"I think this bank crisis, or jam, if left to its own devices is equal to about 100 basis points of tightening, if it continues like this. A big bank failure is incredibly deflationary, it's perhaps the most deflationary thing that could happen to an entire economy. It's more shocking than endless rate hikes, but it gets the darn process over with, even with collateral damage that tends to be a lot worse. No I don't want it to be this way, believe me. This is a bad way to beat inflation, but it will definitely do the job."
Cramer thinks that the risk of further banking failures is not over yet. He also pointed out that as long as small banks continue to suffer from contagion risks, the Fed will need to continue raising interest rates. Cramer said that the only way the Fed's tightening cycle will end is if and when a large bank fails.
As of March 30, the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) has gained 10.12% over the past 6 months. Some of Cramer's "about to pop" stocks that have outperformed the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) include ServiceNow, Inc. (NYSE:NOW), Yum! Brands, Inc. (NYSE:YUM), and JPMorgan Chase & Co. (NYSE:JPM). Let's now look at how all of Cramer's picks from October 2022 have performed relative to the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) over the past 6 months.
Our Methodology
We got Cramer's stocks from his October 2022 list of 14 stocks that were "about to pop" according to him. We calculated the 6-month returns of each of these stocks, as of March 30, relative to the SPDR S&P 500 ETF Trust (NYSEARCA:SPY). The idea was to gauge the performance of Cramer's stock picks. We have ranked these stocks in ascending order of their 6-month returns, relative to the SPDR S&P 500 ETF Trust (NYSEARCA:SPY).
14 Stocks "About To Pop" According To Jim Cramer: In Retrospect
14. Generac Holdings Inc. (NYSE:GNRC)
Number of Hedge Fund Holders: 31
6-Month Performance as of March 30 (Relative to SPY): -47.00%
One of Jim Cramer's top picks from October 2022 was Generac Holdings Inc. (NYSE:GNRC). The company is an American manufacturer of backup power generation facilities Cramer said that the he liked how low the stock was, enough to add it to his charitable trust. Shares of Generac Holdings Inc. (NYSE:GNRC) have lost 47% over the past 6 months, relative to the SPDR S&P 500 ETF Trust (NYSEARCA:SPY), as of March 30.
At the end of Q4 2022, 31 hedge funds were bullish on Generac Holdings Inc. (NYSE:GNRC) and held stakes worth $588.2 million in the company. Of those, Ariel Investments was the top investor in the company and held a stake worth $132 million.
Meridian Funds made the following comment about Generac Holdings Inc. (NYSE:GNRC) in its Q4 2022 investor letter:
“Generac Holdings Inc. (NYSE:GNRC), is a manufacturer of power generation equipment with a leading position in home standby generators. Generac also offers consumers a home energy management system that harnesses and stores power from the sun to be used for backup during utility power outages. Severe weather events that strained already-overburdened power grids in California, Texas, and other key markets have created a significant opportunity for home power generation equipment manufacturers. Moreover, with the future potential to aggregate these distributed energy resources through the company’s grid services business, homeowners have the potential to monetize these assets. The stock declined during the quarter as the company reduced its full-year revenue guidance due largely to labor shortages in Generac’s dealer network which resulted in a slowdown in installations and implementations. As a consequence, dealers have reduced their on-site inventory. During the period, we exited our position in the company.”
13. KeyCorp (NYSE:KEY)
Number of Hedge Fund Holders: 33
6-Month Performance as of March 30 (Relative to SPY): -34.95%
KeyCorp (NYSE:KEY) was another one of Jim Cramer's stocks that were "about to pop". He recommended the stock amid high interest rates, pointing out that its dividend yield is attractive. As of March 30, the stock is offering a forward dividend yield of 6.47% and is trading at a PE multiple of 6x.
KeyCorp (NYSE:KEY) has underperformed the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) by 34.95% over the past 6 months, as of March 30.
KeyCorp (NYSE:KEY) was held by 33 hedge funds at the close of Q4 2022. These funds disclosed collective positions worth $582 million in the company. As of December 31, Adage Capital Management is the largest investor in KeyCorp (NYSE:KEY) and has a position worth $128.4 million.
Some of the best performers among Jim Cramer's stock picks from October 2022 include ServiceNow, Inc. (NYSE:NOW), Yum! Brands, Inc. (NYSE:YUM), and JPMorgan Chase & Co. (NYSE:JPM).
12. SBA Communications Corporation (NASDAQ:SBAC)
Number of Hedge Fund Holders: 42
6-Month Performance as of March 30 (Relative to SPY): -21.10%
SBA Communications Corporation (NASDAQ:SBAC) was one of Cramer's top picks from the telecommunications industry. Cramer was bullish on the company's long-term growth story. SBA Communications Corporation (NASDAQ:SBAC) has underperformed the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) by 21.10% over the past 6 months, as of March 30.
At the close of the fourth quarter of 2022, 42 hedge funds were long SBA Communications Corporation (NASDAQ:SBAC) and held positions worth $1.02 billion in the company. Of those, Diamond Hill Capital was the leading stockholder in the company and disclosed a stake worth $165.9 million.
Renaissance Investment Management made the following comment about SBA Communications Corporation (NASDAQ:SBAC) in its Q3 2022 investor letter:
“Conversely, we sold our position in SBA Communications Corporation(NASDAQ:SBAC) following a deterioration in fundamental factors. From a qualitative perspective, we were concerned about the company’s aggressive international expansion which increases currency risk, but, more importantly, signals a lack of investable growth in the U.S. market now that 5G wireless investments are slowing. We were also becoming increasingly worried about the impact that rising interest rates will have on SBA’s over-levered balance sheet.”
11. Crown Castle International Corp. (NYSE:CCI)
Number of Hedge Fund Holders: 51
6-Month Performance as of March 30 (Relative to SPY): -20.40%
Crown Castle International Corp. (NYSE:CCI) was one of Cramer's telecom stocks that were "about to pop". He mentioned it along his other telecom picks and noted that the company's long-term growth prospects are promising. As of March 30, Crown Castle International Corp. (NYSE:CCI) has lost 20.40% over the past 6 months, relative to the SPDR S&P 500 ETF Trust (NYSEARCA:SPY).
51 hedge funds disclosed having stakes in Crown Castle International Corp. (NYSE:CCI) at the end of Q4 2022. The total value of these stakes amounted to $1.64 billion, up from $1.11 billion in the preceding quarter with 48 positions. The hedge fund sentiment for the stock is positive.
As of December 31, Bill & Melinda Gates Foundation Trust is the largest shareholder in Crown Castle International Corp. (NYSE:CCI) and holds a position worth $192 million.
Carillon Tower Advisers made the following comment about Crown Castle Inc. (NYSE:CCI) in its Q4 2022 investor letter:
“Crown Castle Inc. (NYSE:CCI) underperformed due to higher interest rates and a slightly less constructive outlook for 2023. The company is seeing some pressure from non-renewals as a result of a merger between two major telecommunications companies.”
10. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 100
6-Month Performance as of March 30 (Relative to SPY): -19.09%
Bank of America Corporation (NYSE:BAC) was among Cramer's top bank stock picks. He liked the major bank due to its "massive deposit base" and noted that it has "tiny" loan losses and "gigantic" credit balances. Bank of America Corporation (NYSE:BAC) has lost 19.09% over the past 6 months, relative to the SPDR S&P 500 ETF Trust (NYSEARCA:SPY), as of March 30.
At the end of the fourth quarter of 2022, 100 hedge funds were bullish on Bank of America Corporation (NYSE:BAC) and held collective stakes worth $37.5 billion in the company. Of those, Berkshire Hathaway was the most prominent stockholder and held a position worth $33.4 billion.
Here is what Ariel Investments had to say about Bank of America Corporation (NYSE:BAC) in its Q3 2022 investor letter:
“We initiated three new positions in the quarter. We added leading financial institution Bank of America Corporation (NYSE:BAC) which serves individual consumers, small and middle-market businesses, and large corporations with a full range of banking, investing, asset management, and other financial and risk management products and services. The current company was formed through various mergers including NationsBank, FleetBoston, US Trust, Countrywide Financial, and Merrill Lynch with the legacy commercial bank to form a national banking powerhouse and bulge bracket investment firm. As one of the ‘Big Four’ U.S. banks it enjoys scale driven cost advantages and economies of scale which provide meaningful competitive advantages and potential for strong returns in the largely commoditized banking industry. A survivor of the financial crisis, BAC has emerged with a solid capital base and stands to benefit from a rising interest rate environment.”
9. American Tower Corporation (NYSE:AMT)
Number of Hedge Fund Holders: 61
6-Month Performance as of March 30 (Relative to SPY): -17.48%
Cramer was bullish on American Tower Corporation (NYSE:AMT) and mentioned it among his top telecom stocks that were "about to pop". The Mad Money host said: "these are terrific (and) consistent companies with very good long-term growth". As of March 30, American Tower Corporation (NYSE:AMT) has underperformed the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) by 17.48% over the past 6 months.
61 hedge funds held stakes in American Tower Corporation (NYSE:AMT) at the close of the fourth quarter of 2022. The total value of these stakes amounted to $3.38 billion. As of December 31, Akre Capital Management is the most prominent shareholder in the company and has a stake worth $1.48 billion.
ClearBridge Investments made the following comment about American Tower Corporation (NYSE:AMT) in its Q4 2022 investor letter:
“Real estate and communication services sectors generated positive returns but lagged others within the Russell 1000 Value Index. The Strategy benefited from its underweight in the real estate sector with American Tower Corporation(NYSE:AMT) as its only holding. REITs are generally perceived to be interest rate sensitive, which negatively impacted American Tower’s recent stock performance. However, we remain confident in the company’s highly durable and predictable business model, which is supported by long-term customer contracts and insatiable wireless data growth.”
8. Mid-America Apartment Communities, Inc (NYSE:MAA)
Number of Hedge Fund Holders: 23
6-Month Performance as of March 30 (Relative to SPY): -16.49%
One of Cramer's favorite REITs in October was Mid-America Apartment Communities, Inc (NYSE:MAA). He noted that the company's operations are in areas where "housing is in short supply" and so it would be "stupid" to sell the stock. Cramer thought Mid-America Apartment Communities, Inc (NYSE:MAA) was "about to pop" but over the past 6 months, Mid-America Apartment Communities, Inc (NYSE:MAA) has underperformed the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) by 16.49%, as of March 30.
At the end of Q4 2022, Mid-America Apartment Communities, Inc (NYSE:MAA) was spotted on 23 investors' portfolios that disclosed stakes worth $323 million in the company. Of those, Zimmer Partners was the largest shareholder in the company and held a position worth $153 million.
Carillon Tower Advisers made the following comment about Mid-America Apartment Communities, Inc. (NYSE:MAA) in its Q3 2022 investor letter:
“Mid-America Apartment Communities, Inc. (NYSE:MAA) Communities is a REIT that owns, develops, acquires, and operates multi-family apartment communities in the Sunbelt region of the U.S. In recent quarters, its results have benefited from significant lease rate increases, but investors have begun to anticipate a deceleration as monetary policy takes aim at inflation.”
7. Stanley Black & Decker, Inc. (NYSE:SWK)
Number of Hedge Fund Holders: 25
6-Month Performance as of March 30 (Relative to SPY): -11.73%
One of Cramer's top stock picks from October was Stanley Black & Decker, Inc. (NYSE:SWK). He called the stock a "fantastic brand name" and "everybody's go-to toolmaker". As of March 30, Stanley Black & Decker, Inc. (NYSE:SWK) has lost 11.73% over the past 6 months, relative to the SPDR S&P 500 ETF Trust (NYSEARCA:SPY).
25 hedge funds held stakes in Stanley Black & Decker, Inc. (NYSE:SWK) at the end of the fourth quarter of 2022. The total value of these stakes amounted to $493.9 million. As of December 31, D E Shaw is the largest investor in the company and holds a position worth $111.3 million.
Ariel Investments made the following comment about Stanley Black & Decker, Inc. (NYSE:SWK) in its Q3 2022 investor letter:
“Shares of Stanley Stanley Black & Decker, Inc. (NYSE:SWK) sharply declined in the quarter as inflation and rapidly rising rates drove a swift deterioration in consumer demand. In response, SWK is laser-focused on reducing inventory to generate cash flow and re-sizing the cost base through simplifying its corporate structure, optimizing operations and transforming the supply chain. Though the macroeconomic backdrop remains challenging, we have conviction in SWK’s experienced executive management team and think the balance sheet is well-positioned to weather the storm. At current levels, SWK is trading at a substantial, historically-high discount to our estimate of private market value.”
While Stanley Black & Decker, Inc. (NYSE:SWK) has underperformed over the past 2 quarters, Cramer's picks that have outperformed the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) over the past 6 months include ServiceNow, Inc. (NYSE:NOW), Yum! Brands, Inc. (NYSE:YUM), and JPMorgan Chase & Co. (NYSE:JPM).
6. Domino's Pizza, Inc. (NYSE:DPZ)
Number of Hedge Fund Holders: 44
6-Month Performance as of March 30 (Relative to SPY): -6.58%
Cramer said that Domino's Pizza, Inc. (NYSE:DPZ) is a "well-run" company that is "coping with food inflation and wage pressure". He named the company among one of his top restaurant stock picks that were "about to pop". As of March 30, Domino's Pizza, Inc. (NYSE:DPZ) has underperformed the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) by 6.58%, over the past 6 months.
At the close of Q4 2022, Domino's Pizza, Inc. (NYSE:DPZ) was a part of 44 investors' portfolios that disclosed collective positions worth $1.46 billion in the company. Of those, Holocene Advisors was the top shareholder in the company and held a position worth $252 million.
LRT Capital Management made the following comment about Domino’s Pizza, Inc. (NYSE:DPZ) in its October investor letter:
“Domino’s Pizza, Inc. (NYSE:DPZ) is the world’s largest franchisor of pizza restaurants with over 13,800 locations in 85 countries. As for any restaurant operator, the key metric to consider for Domino’s Pizza is same-store-sales (SSS) growth. Growing same-store-sales are ultimately how a restaurant business increases earnings from its existing assets. The company continues to impress in this criterion with SSS having grown in the U.S. for 40 consecutive quarters, and an astounding 109 straight quarters internationally.
Two-thirds of the company’s stores are currently abroad, and the international segment remains the company’s largest growth opportunity, as the penetration of convenient fast food remains lower abroad than in the United States. Pizza is a product with exceptionally high gross margins, one that “translates” well across different cultures, and one that literally “travels well”, not losing much of its appeal when delivered in a cardboard box. The rise of 3rd party delivery platforms such as Uber Eats, Doordash and Grubhub is challenging the pizza category as it has expanded the number of choices consumers have for convenient takeout. However, the economics of food delivery remain challenging for most restaurants and platforms alike25, while pizza delivery continues to be highly profitable. Regardless of how the “delivery wars” currently playing out end, Domino’s financial results show little impact of this increased competition, and the company continues to deliver exceptional financial performance…” (Click here to read the full text)
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Disclosure: None. 14 Stocks "About To Pop" According To Jim Cramer: In Retrospect is originally published on Insider Monkey.
