We recently published a list of Jim Cramer’s Top 10 Stock Picks for June. Since Comfort Systems USA, Inc. (NYSE:FIX) ranks higher in the list, the stock deserves a deeper look. But first, let’s see what Cramer was talking about during his programs earlier this week.
Jim Cramer in a latest program lamented over Salesforce’s latest declines following the company’s weak Q1 results and guidance cut. Cramer said he’s been “championing” Salesforce ever since the company went public since he’s used the Cloud software company’s product when he started Street.com. Cramer said Salesforce has been one of the most “distinguished” members of the enterprise software industry. Cramer identified competition as one of the biggest threats to Salesforce, since he believes every other “young person” coming out of the school majoring in computer science knows if you want to make money you should make or sell software for the enterprise world.
The generative artificial intelligence revolution is jolting the SaaS world to its core, according to Cramer, as companies begin to explore the power of AI and question whether they should keep paying for SaaS subscriptions or hire more people when AI-based tools can do similar jobs in a more efficient way.
Methodology
For this article we watched several latest programs of Jim Cramer aired over the past two weeks and picked 10 stocks he’s recommending investors to buy. With each stock we have mentioned the number of hedge fund investors having stakes in the company. 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).
Comfort Systems USA, Inc. (NYSE:FIX)
Number of Hedge Fund Investors: 34
Jim Cramer was recently asked about Texas-based heating, ventilation and air conditioning installation, maintenance, repair and replacement services company Comfort Systems USA, Inc. (NYSE:FIX). Cramer said “HVAC is king!” and added that he likes Comfort Systems USA, Inc. (NYSE:FIX). In April, Comfort Systems USA, Inc. (NYSE:FIX) upped its dividend by 20%. During the first quarter, Comfort Systems USA, Inc. (NYSE:FIX) GAAP EPS came in at $2.69, surpassing estimates by $0.69. Revenue in the quarter jumped 30.8% year over year to $1.53 billion, beating estimates by $60 million.
Insider Monkey’s database of 919 hedge funds shows that 34 hedge funds reported owning stakes in Comfort Systems USA, Inc. (NYSE:FIX) as of the end of the first quarter of 2024. The biggest stakeholder of Comfort Systems USA, Inc. (NYSE:FIX) during this period was Richard Driehaus’s Driehaus Capital which owns a $46 million stake in Comfort Systems USA, Inc. (NYSE:FIX).
Over the past five years Comfort Systems USA, Inc. (NYSE:FIX) shares have gained about 600%. The stock’s PE ratio is 33, which is high when compared to the sector media PE of 19.44. Comfort Systems USA, Inc. (NYSE:FIX) is expanding its footprint through acquisitions. Comfort Systems USA, Inc. (NYSE:FIX) earlier this year announced to acquire Summit Industrial Construction to gain exposure to technology, power and industrial firms as clients. Population growth and rising demand for mechanical and plumbing services is another organic growth catalyst for the stock.
However, for value-conscious investors, the market presents several other opportunities.
If you are looking for an AI stock that is as promising as Microsoft but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Comfort Systems USA, Inc. (NYSE:FIX) ranks 5th in Insider Monkey’s list of the Jim Cramer’s 10 Stock Picks Heading Into June.
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Disclosure: None. This article is originally published at Insider Monkey.