We recently published a list of Jim Cramer Stock Portfolio for Q4: Top 11 Stocks to Buy and Sell. Since LyondellBasell Industries NV (NYSE:LYB) ranks 8th 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).
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LyondellBasell Industries NV (NYSE:LYB)
Number of Hedge Fund Investors: 41
When asked about LyondellBasell, Cramer said that while it’s a very “well-run company” it’s not a stock he’s recommending.
LyondellBasell Industries NV (NYSE:LYB) has a dividend yield of over 5.6%. The company’s profitability is driven mainly by its Olefins & Polyolefins (Americas) and Intermediates & Derivatives segments. However, the company’s margins are being dragged down by its Olefins & Polyolefins (Europe, Asia & International) and Refining segments, which generate substantial revenue but contribute little to EBITDA.
LyondellBasell Industries NV (NYSE:LYB) management is on track to exit the refining business by next year. However, they are committed to improving the performance of the Olefins & Polyolefins segment in Europe, Asia, and international markets. This is evident from the company’s capital expenditures in these regions and its recent acquisition of a 35% stake in the NATPET polypropylene joint venture in Saudi Arabia. EBITDA margins in these segments have been in the red or at low single digits for several quarters, so exiting refining and improving the international O&P segment could significantly boost overall profitability.
Over the past 12 months, capital expenditures were 138% of the company’s annual depreciation, signaling that management is reinvesting in the business beyond just maintaining existing operations.
Overall, LyondellBasell Industries NV (NYSE:LYB) ranks 8th 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 LyondellBasell Industries NV (NYSE:LYB), 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 LYB 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.