We recently published an article titled, Jim Cramer is Talking About These 12 Stocks. In this article, we are going to take a look at where Affirm Holdings, Inc. (NASDAQ:AFRM) stands against the other stocks that Jim Cramer has talked about.
During September 30’s episode of Mad Money, CNBC’s Jim Cramer delved into the previous three months and the market’s events. He identified some positive developments amidst the turbulence in the market.
Cramer highlighted that Dow inched up 17%, the S&P 500 went up 42% while Nasdaq gained 38% during the months. He remarked, “For once, good news was actually good news and interesting.” He went on to say that miracles still happened in the stock market’s third quarter. He pointed out that July, August, and September yielded remarkable returns, even highlighting the typically troublesome month of September, which saw the broader market rising significantly.
Cramer elaborated on the lead-up to the Federal Reserve’s decision to cut rates by 50 basis points. He characterized the economic landscape as having “no landing at all,” explaining that the economy continued to grow, inflation decreased, and unemployment ticked up. He suggested that the central bank laid the groundwork for a significant rate cut, which was the reason that there was no panic on Wall Street after the cut. The former hedge fund manager also praised Federal Reserve Chair Jerome Powell for achieving the challenging feat of a double rate cut without shocking the markets.
Moving on, Cramer talked about how the market’s breadth expanded as well, with many sectors gaining traction beyond the dominant Magnificent Seven tech stocks. He noted that a variety of industries, including banks, utilities, retail, healthcare, housing, and transportation, enjoyed their moment in the spotlight.
As for the upcoming election, he referenced Michael Cembalest of J.P. Morgan Asset Management, who described it as “the most polarized election in 100 years.” Cramer observed that, despite the political drama surrounding the elections, Wall Street remained largely unfazed, even in response to significant events like Vice President Kamala Harris potentially replacing President Biden on the Democratic ticket and the attempted assassination of former President Donald Trump.
Cramer also highlighted a shift in the housing market, pointing out the first signs of relief from formerly soaring inflation figures. He suggested that an increase in available homes could be the breakthrough needed to address this intractable asset class that has resisted price declines.
In terms of international markets, he noted that the Chinese market staged a rally, even in light of dismal economic news, owing some of this movement to government-ordered buybacks and influxes of capital.
Cramer commented on the ongoing speculation about stagflation, particularly concerning oil prices, reminiscent of the oil crisis in 1973. He addressed the ongoing conflict in the Middle East, mentioning that Saudi Arabia had abandoned its unofficial price target of $100 per barrel in favor of increasing production.
While many believe that oil prices could soar at any moment, Cramer expressed skepticism, suggesting that although a spike could still occur due to geopolitical factors, he thinks those fears may be overstated.
Reflecting on the past nine months, he concluded that despite the potential for stagflation, 2024 has surprisingly turned out to be a great year for the stock market, defying expectations.
Our Methodology
For this article, we compiled a list of 12 stocks that Jim Cramer mentioned during his episode of Mad Money on September 30. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 900 hedge funds.
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).
Jim Cramer Called Affirm Holdings, Inc. (NASDAQ:AFRM) ‘Real Good’
Affirm Holdings, Inc. (NASDAQ:AFRM)
Number of Hedge Fund Holders: 34
Affirm Holdings, Inc. (NASDAQ:AFRM) operates a payment network that spans the United States, Canada, and beyond. The company provides a comprehensive platform that includes point-of-sale payment solutions for consumers, merchant commerce solutions, and a user-friendly app tailored for consumers. Cramer called the stock “real good” and said that it is “going higher.” Over the last 12 months, the stock is up by over 90%.
In a rapidly evolving industry, the company is positioning itself as a player in the competitive buy now, pay later (BNPL) sector, competing with other firms such as Klarna Bank AB. Max Levchin, the founder and CEO, has commented that the company is outpacing its competitors in this crowded market, noting a significant demand for its services.
In June, Affirm Holdings (NASDAQ:AFRM) announced that its BNPL loans would be integrated with Apple Pay, and as of September 16, eligible users could utilize this feature when checking out online or in-app on iPhones and iPads.
The integration allows Apple Pay users in the U.S. to request flexible payment options, splitting purchases into biweekly or monthly installments with attractive terms, including options for as low as 0% APR. This collaboration improves the user experience as it combines the convenience and security of Apple Pay with the company’s focus on transparency and no hidden fees.
In September, Mizuho Securities assigned the stock an Outperform rating with a price target set at $65. The analysts pointed to favorable conditions for the company, especially following the Federal Reserve’s decision to reduce interest rates by 50 basis points.
The firm sees this development as beneficial for the company for two key reasons: lower rates improve revenue less transaction costs and is likely to attract new customers or encourage existing users to take on additional debt.
Furthermore, the analysts predict that the reduction in rates could lead to a substantial increase, estimated between 30% to 35%, in gross merchandise volume for fiscal 2027. This, combined with the company’s operating leverage, could potentially result in earnings per share that double or even triple current consensus forecasts, according to the analysts.
Overall, AFRM ranks 7th on our list of stocks Jim Cramer is talking about. While we acknowledge the potential of AFRM as an investment, 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 AFRM 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.