We recently published a list of Jim Cramer’s Latest Portfolio: Top 9 Stocks to Buy and Sell. Since Equity Residential (NYSE:EQR) ranks 7th on the list, it deserves a deeper look.
Jim Cramer is exuberant about the Federal Reserve’s aggressive rate cut.
“Believe me, there are few things more friendly than a 50 basis point rate cut,” Cramer said in a recent program.
The CNBC host said that he has reminded his viewers repeatedly that when the Fed is your “enemy” you should stick to recession-proof stocks that can produce consistent earnings despite market slowdowns.
“Once the Fed is done tightening and we start seeing signs of impending rate cuts you need to load up on the cyclicals, the companies that see massive earnings growth when the economy accelerates,” Cramer reminded his viewers about his advice on how to play the interest-rate game.
Jim Cramer has been talking about all sorts of stocks during his latest programs. In this article we picked 9 important stocks he’s bearish/bullish on and analyzed these companies in detail. With each stock we have mentioned its 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).
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Equity Residential (NYSE:EQR)
Number of Hedge Fund Investors: 30
Jim Cramer was asked about Equity Residential (NYSE:EQR) in a latest program. He called the stock a “total winner.”
“That is just an amazing stock.It still got about a 3% yield you can still make money in it.”
Cramer said a shortage of housing and apartment complexes could create a further runaway for this stock, which is already up 20% so far this year.
Equity Residential (NYSE:EQR) owns about 79,738 apartments across major U.S. cities like Boston, New York, and San Francisco. The REIT focuses on high-end tenants in urban areas, primarily managing mid-and high-rise apartments, along with a number of garden-style units.
Bank of America Securities recently downgraded the stock to Neutral from Buy on concerns that a softening U.S. labor market may negatively impact its portfolio. Equity Residential (NYSE:EQR) urban demographic is seen as more vulnerable to potential economic slowdowns.
Equity Residential (EQR) has seen a slowdown in its growth metrics over recent quarters. Same-store rental income increased from $697.8 million in Q2 2023 (a 5.5% year-over-year growth) to $718.2 million in Q2 2024, but the growth rate dropped to 2.9%. Similarly, same-store net operating income (NOI) growth decelerated from 5.6% in Q2 2023 to 3.0% in Q2 2024. Despite this, the REIT provided positive guidance, raising expectations for same-store rental income by 70 basis points and NOI by 145 basis points. Additionally, expense guidance was reduced by 100 basis points, situating expected NOI growth at 3.25%, slightly higher than the latest YoY growth.
Baron Real Estate Fund stated the following regarding Equity Residential (NYSE:EQR) in its Q2 2024 investor letter:
“In the second quarter, the shares of Equity Residential (NYSE:EQR), the largest U.S. multi-family REIT, appreciated due to continued strong operating updates, an improved full-year growth outlook, and faster-than-expected improvement in the company’s West Coast markets. Management has assembled an excellent portfolio of Class A apartment buildings located in high barrier-to-entry coastal markets with favorable long-term demographic trends and muted overall supply growth. Please see the “Top net purchases” for further thoughts on the company.
In the second quarter, we increased the Fund’s REIT exposure to best-in-class multi-family owners/operators Equity Residential and AvalonBay Communities, Inc. Our meetings with each management team supported our view that both companies are led by astute executives who are highly focused on driving value creation for shareholders…” (Click here to read the full text)
Overall, Equity Residential (NYSE:EQR) ranks 7th on Insider Monkey’s list titled Jim Cramer’s Latest Portfolio: Top 9 Stocks to Buy and Sell. While we acknowledge the potential of Equity Residential (NYSE:EQR), 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 EQR 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.