We recently published a list of Jim Cramer Says Buy These 5 Industrial Stocks Before Rate Cuts — And 5 Other Stocks He’s Talking About. Since Autozone Inc (NYSE:AZO) ranks 6th on the list, it deserves a deeper look.
Jim Cramer said in a latest program on CNBC that the NASDAQ has become an “annoying source of funds” for other indexes as mutual funds pull out of tech and growth stocks that would not benefit from rate cuts and funnel these funds into the companies that can “super-charge” their earnings amid the expected rate cuts in September.
Cramer said that the decline of tech stocks could be “painful” for many because while these companies do not benefit from rate cuts, their earnings are still strong. Cramer said there are two kinds of companies that will benefit from rate cuts: the ones with cyclical businesses that thrive during rate cuts and those with high dividend yields.
Cramer said that by the time the Fed would announce its first rate cuts, it would have been “too late” to buy the stocks that benefit from rate cuts.
“You have to let them recharge, let them come down and then you can pull the trigger,” Cramer said.
In a separate program a few days ago Jim Cramer specifically talked about five industrial stocks he’s bullish on before rate cuts. In this article we mentioned these five stocks along with a few other stocks Cramer is talking about during his programs these days. With each company we have mentioned the number of hedge fund investors. 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).
An auto repair shop with a car in the foreground, demonstrating the need for comprehensive automobile coverage.
Autozone Inc (NYSE:AZO)
Number of Hedge Fund Investors: 45
A caller recently asked Jim Cramer about his thoughts on Autozone Inc (NYSE:AZO), saying the company buys back a lot of its stock. Here is what Cramer said:
“The problem is that’s kind of all they are doing right now, they don’t have the old mojo, I’d admit that they lack the serious mojo per share number that I always like to have. But I will say this, they have hung in here pretty darn well.”
Cramer said that he would still buy the stock of Autozone Inc (NYSE:AZO) at the current levels ($3155).
Autozone Inc (NYSE:AZO) is an American retailer of aftermarket automotive parts and accessories. Bears used to argue that the company would have a tough time amid the rise of EVs since the demand for traditional auto parts would decline. However, ever since the EV demand slowed down, that argument fell apart. The traditional gasoline-powered cars still dominate U.S. roads, accounting for over 98% of all registered vehicles as of May 2024. Even if EV sales were to match those of internal combustion engine (ICE) cars, it would take a considerable amount of time for EVs to make a noticeable impact on the overall vehicle landscape.
Overall, Autozone Inc (NYSE:AZO) ranks 6th on Insider Monkey’s list titled Jim Cramer Says Buy These 5 Industrial Stocks Before Rate Cuts — And 5 Other Stocks He’s Talking About. While we acknowledge the potential of Autozone Inc (NYSE:AZO), 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 AZO 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.