We recently published a list of Jim Cramer Stock Portfolio for Q4: Top 11 Stocks to Buy and Sell. Since SoFi Technologies Inc (NASDAQ:SOFI) ranks 11th on the list, it deserves a deeper look.
Jim Cramer in a latest program on CNBC talked about the importance of using short-term rallies to your advantage. He said that investors should know when to take the chips off the table.
“The idea that you should buy and hold through both the best of times and worst of times is probably incredibly foolish, with only very few exceptions,” Cramer said.
Cramer said that if the stock you bought is going higher and higher and you keep resisting the urge to take some profits, you won’t make any actual money from these gains if the stock comes down later paring all these profits. This seems straightforward but the idea of buying low and selling high is easier said than done, Cramer said.
“Don’t get carried away by the optimism. Instead, keep your head on straight, check your emotions, focus on long term and think about ringing the register, especially on stocks that might be getting too high,” Cramer added.
For this article we watched several latest programs of Jim Cramer aired on CNBC and picked 10 stocks he’s talking about. We also picked an interesting prediction Cramer made back in 2021 about a stock and saw how it turned out. 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).
Photo by Austin Distel on Unsplash
SoFi Technologies Inc (NASDAQ:SOFI)
Number of Hedge Fund Investors: 29
When asked about SoFi Technologies Inc (NASDAQ:SOFI) during a program on CNBC, Cramer said the following:
“Now the rates are coming down you are gonna see actually it’s more of a technology stock but it’s gonna go higher.”
SoFi Technologies Inc (NASDAQ:SOFI) stock is indeed poised to grow amid rate cuts. The company’s CEO Anthony Noto’s prediction in early September that the Federal Reserve would cut rates by 75 basis points by the end of 2024 seems to be playing out. The Fed has already cut rates by 50 basis points, and it’s likely that Noto’s forecast will prove accurate by year’s end. Lower rates should give SoFi more flexibility and improve profitability.
For the second quarter, SoFi Technologies Inc (NASDAQ:SOFI) reported total GAAP net revenue of $598.6 million, up 20% year-over-year, and adjusted net revenue of $597 million, a 22% increase. This performance is impressive, especially given the high interest rate environment.
SoFi’s shift towards diversifying revenue sources is evident, particularly after its $1 billion acquisition of Galileo and the merger with Golden Pacific last year. This move away from traditional lending addresses critics who still see SoFi Technologies Inc (NASDAQ:SOFI) as a typical bank.
The company is expected to see earnings per share (EPS) grow at a compound annual growth rate (CAGR) of 47.3% over the next six years. By fiscal year 2029, this could lead to a price-to-earnings (P/E) ratio of around 7.9x. Based on the growth SoFi Technologies Inc (NASDAQ:SOFI) is seeing, the stock looks undervalued.
Overall, SoFi Technologies Inc (NASDAQ:SOFI) ranks 11th on Insider Monkey’s list titled Jim Cramer Stock Portfolio for Q4: Top 11 Stocks to Buy and Sell. While we acknowledge the potential of SoFi Technologies Inc (NASDAQ:SOFI), 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 SOFI 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.