We recently published the list of 11 stocks Jim Cramer is bearish on. Crown Castle Inc (NYSE:CCI) ranks 7th in the list. In this article we will take a deeper look at Crown Castle Inc (NYSE:CCI) and find out whether Cramer’s thesis holds any weight.
Jim Cramer in a latest program said the “bulls” want the economy to slow down, they want rate cuts as well as a strong demand so that “their companies” won’t have to worry about the yield curve and macroeconomic situation. Cramer highlighted that all of this is confusing, as it’s not possible to have a weaker economy and yet see companies make a lot of money. Cramer also pointed to the latest data showing slowing manufacturing activity. The Institute for Supply Management’s manufacturing purchasing managers index fell to 48.7 in May from 49.2 in April, while analysts were expecting the index to jump to 49.5. Cramer said that the economic activity in the manufacturing sector contracted for the 18th time in the last 19 months. Cramer said the new orders contraction in May was a “little over frightening.”
Talking about the energy sector, Cramer said that he’d buy oil and gas stocks as the economy would sooner or later begin to get back to normal. Cramer also said that it’s surprising to see many retailers, including Dick’s Sporting Goods, GAP and Best Buy, performing exceptionally well. Cramer also talked about a Wall Street analyst who “double upgraded” Best Buy shares, saying the company “might be the biggest beneficiary” of the AI PCs boom. Cramer said he agrees with this thesis.
For this article we watched several latest programs of Jim Cramer and picked 11 stocks he’s bearish on. With each stock we have mentioned hedge fund sentiment. 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).
Crown Castle Inc (NYSE:CCI)
Number of Hedge Fund Investors: 43
Texas-based telecom company Crown Castle Inc (NYSE:CCI) is one of the stocks Jim Cramer is recommending investors to stay away from. Cramer said in a program earlier this month that there’s “no growth” in Crown Castle Inc (NYSE:CCI) and Crown Castle Inc (NYSE:CCI) is “incredibly poorly managed.”
“I’m going to have to say stay away. I don’t want you near that stock.”
This is a change from Cramer’s earlier view where he was recommending investors to hold the stock as he thought Crown Castle Inc (NYSE:CCI) was bottoming. In April, Cramer had recommended investors to hold Crown Castle Inc (NYSE:CCI) because of its high dividend yield. He, however, also said at that time that Crown Castle Inc (NYSE:CCI) was “mismanaged,” adding that Crown Castle Inc (NYSE:CCI) can “bottom here” because of its over 6% dividend yield.
Analysts expect Crown Castle Inc’s (NYSE:CCI) adjusted FFO to see a whopping 8% contraction this year. According to data from Yahoo Finance, Crown Castle Inc (NYSE:CCI) is expected to contract by 10.10% in 2025. Crown Castle Inc (NYSE:CCI) is trying to cut its heavy debt load. It started 2024 with $22.8 billion in net debt. However, Crown Castle Inc (NYSE:CCI) has $6 billion in available liquidity. Debt maturities through 2025 are worth only $2 billion. While some believe the market is already pricing in Crown Castle Inc’s (NYSE:CCI) weaknesses and applaud its current P/AFFO of 14, which is low based on historical levels, Crown Castle Inc (NYSE:CCI) bears believe the company will have to do a lot to turn the tables around.
Crown Castle Inc (NYSE:CCI) ranks 7th in Insider Monkey’s list of the Jim Cramer Says You Should Not Buy These 11 Stocks.
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.
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Disclosure: None. This article is originally published at Insider Monkey.