In this article, we will take a detailed look at the 10 Stocks You Should Not Buy According to Jim Cramer. For a quick overview of such stocks, read our article 5 Stocks You Should Not Buy According to Jim Cramer.
Jim Cramer in a latest program talked about the market rally on April 22. Cramer said that when you have many down days you can almost always expect a bounce back. Cramer was surprised that the market “shrugged off” Verizon’s weak earnings which according to him was “disappointing” in every category, including cash flows. Cramer highlighted Tesla’s continuous declines despite the company’s latest announcement of price cuts and layoffs. Tesla’s competitors Ford and GM, on the other hand, gained, with the former gaining 6%.
People Do Not Want Tesla Cars, Cramer Says
Jim Cramer commented on Tesla’s declines and said that people “still want cars” but they don’t want Teslas or “even EVs in general.” Cramer revealed that his Charitable Trust owns a stake in Ford, which according to him, has the “best non-electric lineup including hybrids.” Cramer highlighted that Ford is one of the cheapest stocks in the S&P 500 and the latest jump in the stock shows the market is willing to buy cheap stocks.
Another reason behind the latest market rally was financials stocks. Cramer said Bank of America and JPMorgan were impressive, but “nothing comes close” to American Express.
Cramer Calls Nvidia a “Hideous Stock” Because of Recent Losses
Cramer also talked about NVIDIA Corp (NASDAQ:NVDA), his favorite AI stock which has fallen off the cliff recently. Cramer urged his viewers to “listen” and “don’t laugh” has he analyzed the latest Nvidia moves. Cramer admitted NVIDIA Corp (NASDAQ:NVDA) has been a “hideous” stock lately.
“Nvidia has gone from being the start of the show to being the goat of the game, and I’m not talking about the greatest of all time.”
Cramer said Nvidia’s stock may have finally become “cheap enough to start tempting people.” However, Cramer said many high-multiple stocks roared back in the latest rally. He said if NVIDIA Corp (NASDAQ:NVDA) hadn’t bounced back in the recent rally, it would have been a “horrible sign”
However, Cramer reiterated that NVIDIA Corp (NASDAQ:NVDA)’s business remains strong. Nvidia is down about 13% over the past one month.
Cramer also mentioned Meta and Alphabet’s gains, saying TikTok’s ban could give a boost to Meta’s numbers.
Cramer Says “Punishment” is Coming
Cramer said that he’s expecting a W-shaped market movement in the next few days. He warned investors that the “punishment” will come, even though the current rally could last for about 10 days.
Methodology
For this article we watched several latest programs of Jim Cramer and picked 10 stocks he’s bearish on. Cramer recommends investors to sell some of these stocks, and urges a wait-and-see approach for others. With each stock we have mentioned hedge fund sentiment using Insider Monkey’s database of 933 hedge funds. Why do we pay attention to hedge fund sentiment? Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
10. Trump Media & Technology Group Corp (NASDAQ:DJT)
Number of Hedge Fund Investors: N/A
Jim Cramer recently talked about Trump Media & Technology Group Corp (NASDAQ:DJT) and how Ken Griffin’s Citadel targeted Trump Media & Technology Group Corp (NASDAQ:DJT) in a statement, calling Trump’s media business a “loser.” Cramer said Griffin can’t seem to stay out of controversies, referring to his shorting of GameStop shares which triggered a battle between retail investors and short-selling hedge fund firms.
Cramer subtly agreed with Citadel’s statement which called Trump Media & Technology Group Corp (NASDAQ:DJT) “basically a joke.”
“I don’t know.. it is kind of a joke”
While Cramer is bearish on DJT, he recommends buying Ford Motor Co (NYSE:F), Meta Platforms Inc (NASDAQ:META) and NVIDIA Corp (NASDAQ:NVDA) for the long term.
9. Nuscale Power Corp (NYSE:SMR)
Number of Hedge Fund Investors: 14
Small modular reactors company Nuscale Power Corp (NYSE:SMR) is one of the stocks Jim Cramer is advising investors to stay away from. Answering a question about whether Nuscale Power Corp (NYSE:SMR) should be bought on the back of increasing power demand following AI datacenter boom, Cramer said he believes “no power company can make money off of it” so you should “better buy” Vertiv or Eaton.
Insider Monkey’s database of 933 hedge funds shows that 14 hedge funds reported owning stakes in Nuscale Power Corp (NYSE:SMR).
8. Aspen Aerogels Inc (NYSE:ASPN)
Number of Hedge Fund Investors: 17
Here is what Jim Cramer said when he was asked about Aspen Aerogels Inc (NYSE:ASPN), the Massachusetts-based aerogel insulation products company.
“This thing is up so big, and what a great opportunity to sell the stock of a money-losing company after you’ve made a lot of money.”
Cramer urged investors to “take the profit” from their investments in Aspen Aerogels Inc (NYSE:ASPN), whose shares are up a whopping 165% over the past one year.
Of the 933 hedge funds tracked by Insider Monkey, 17 hedge funds reported owning stakes in Aspen Aerogels Inc (NYSE:ASPN). The biggest stakeholder of Aspen Aerogels Inc (NYSE:ASPN) during this period was Andrew N. Wiener’s Samjo Capital with a $36 million stake. Hedge funds are also buying Ford Motor Co (NYSE: F), Meta Platforms Inc (NASDAQ:META) and NVIDIA Corp (NASDAQ:NVDA).
7. MarineMax Inc (NYSE:HZO)
Number of Hedge Fund Investors: 20
Jim Cramer thinks investing in recreational boat and yacht retailer company MarineMax Inc (NYSE:HZO) is “too risky” as of now.
“I know the multiple is really low, but I just don’t like that sector of the market at this moment.”
Unlike Ford Motor Co (NYSE: F), Meta Platforms Inc (NASDAQ:META) and NVIDIA Corp (NASDAQ:NVDA), which Cramer recommends for the long term, the CNBC host is bearish on HZO.
During an earnings call in January, MarineMax talked about guidance:
“Based on our industry unit expectation and our results to date, we continue to expect low to mid-single-digit same-store sales growth in 2024. We are seeing increased discounting in the industry and the industry product margins are moderating to prepandemic levels. While our profitability was below our expectations this quarter, we continued to reach the long-term benefits of our higher-margin strategy and are confident in our ability to maintain consolidated margins in the low to mid-30s. Thinking ahead, it’s worth noting that in the March 2023 quarter, we had lower interest costs driven by lower rates and lower inventory than we will have this quarter. Factoring all this in, we now expect our adjusted net income per share to be in the range of $3.20 to $3.70 for fiscal 2024 with adjusted EBITDA to be in the range of $190 million to $215 million.
We are using an annual expected tax rate of approximately 27% and a share count of 23.1 million in our assumptions. Looking at current trends, with the seasonally smallest quarter of the year behind us, we are cautiously encouraged by the reasonably strong start to the winter boat show season.”
Read the full earnings call transcript here.
Ace River Capital made the following comment about MarineMax, Inc. (NYSE:HZO) in its Q3 2023 investor letter:
“MarineMax, Inc. (NYSE:HZO) operates a vertically integrated boat and yacht company with manufacturing, retail sales, financing, insurance, all the way down to maintenance and storage operations. The company has a strong portfolio of marinas and is in a great position to be able to roll up additional retailers, marinas, and storage facilities. I do wish the company would provide more information on its capital allocation strategy and how it thinks about the decisions to target retailers, real estate/marinas, or share repurchases. This would provide foresight for investors and keep management accountable for decisions. RCI Hospitality has a capital allocation strategy slide mentioned earlier in this letter, that is the type of thing I would love to see from MarineMax . I will attempt to bring this up to management. Until I can gather more information about the capital allocation strategy this will remain my lowest conviction holding but trading at just 3x cash with a strong position in the high margin/high cost segments of the boating industry I like the entry point.”
6. IONQ Inc (NYSE:IONQ)
Number of Hedge Fund Investors: 21
Quantum computing company IONQ Inc (NYSE:IONQ) ranks sixth in our list of the stocks you should stay away from according to Jim Cramer. A caller asked Jim Cramer during the Lightning Round segment of his program about IO NQ Inc (NYSE:IONQ). Cramer said it’s a tough time for tech stocks as they are in a “free fall” including the companies that are doing “incredibly well.” In this environment, Cramer said money-losing stocks like IONQ Inc (NYSE:IONQ) are a “sell, sell, sell.”
Of the 933 funds in Insider Monkey’s database, 21 hedge funds reported owning stakes in IONQ Inc (NYSE:IONQ).
Click to continue reading and see 5 Stocks You Should Not Buy According to Jim Cramer.
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Disclosure. None. 10 Stocks You Should Not Buy According to Jim Cramer is originally published on Insider Monkey.