We recently compiled a list of the Jim Cramer is Talking About These 14 Stocks Before Earnings. In this article, we are going to take a look at where Abbott Laboratories (NYSE:ABT) stands against the other stocks Jim Cramer is talking about before earnings.
As earnings season kicks off, Jim Cramer of Mad Money offered insights on what investors should watch in the coming week on Wall Street. He highlighted the anticipated reports from several major banks, along with a few other companies, as key events to monitor.
Cramer expressed optimism about the current market conditions, noting that the situation aligns with his previous predictions that the market would thrive once the Federal Reserve began reducing interest rates while the economy remained strong. He remarked on the spectacular earnings reported by some major banks on Friday, emphasizing that this positive news is particularly impactful now, as opposed to previous instances when the Fed was tightening, causing good news to go largely unnoticed. Cramer believes that with the Fed now supportive of the market, there is potential for more favorable times ahead.
Looking to Monday, Cramer predicted that the focus will shift away from earnings reports due to other significant developments over the weekend. He mentioned the anticipated unveiling of a Chinese stimulus package and noted that although the rally in China has stalled, it could regain momentum if the Chinese government injects substantial funds into real estate and the stock market.
“Now, on Monday, we won’t be focused on earnings. There’s a lot of other stuff happening over the weekend. For instance, I think we’ll be parsing the Chinese stimulus package that’s going to be unveiled. The China rally is stalled, but it can get rolling again if the Chinese Communist Party keeps throwing tens of billions of dollars for the stimulus at real estate, at the stock market.”
Cramer warned that the financial sector will face a significant test on Tuesday, as different banks will be reporting their earnings. Cramer reminded investors that we are just at the beginning of one of the year’s four reporting periods, which can be chaotic and open to various interpretations.
“We’re at the beginning of one of the year’s four reporting periods,” he said. “They’re jumbled. They’re open to a lot of interpretation. They’re fast. So listen to the calls, ponder a moment, and only then should you pull the trigger.”
Our Methodology
For this article, we compiled a list of 14 stocks that are slated to release earnings this week and were discussed by Cramer during his episode of Mad Money on October 11. 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).
An operating room with a doctor monitoring a patient’s vital signs during surgery with a medical device.
Abbott Laboratories (NYSE:ABT)
Number of Hedge Fund Holders: 69
During Mad Money’s episode, Cramer discussed Abbott Laboratories’ (NYSE:ABT) ongoing litigation and the authorities’ evidence regarding the allegations that can potentially help the company and stock going forward.
“Abbott Labs is marred by litigation, too, this time for a specialty baby formula that plaintiffs claim causes grave harm or even death for their infants. But last week, the FDA, NIH, and CDC came out and they said they found no linkage, no conclusive evidence that Abbott’s formula causes the illness. Abbott lost the case not that long ago for a huge amount of money. It’s litigating another one now in the same venue.
I think it could lose that one, too. But the FDA, NIH, and CDC comments could potentially turn the tide in Abbott’s favor going forward, which would be worth a great deal to this $116 stock.”
Abbott Laboratories (NYSE:ABT) is engaged in discovering, developing, manufacturing, and selling healthcare products. In recent years, the company’s FreeStyle Libre franchise, which includes continuous glucose monitoring (CGM) systems, has emerged as a significant growth engine for the company.
The systems assist individuals with diabetes in effectively tracking their blood glucose levels. The company is heavily invested in innovation, which is evident in its recent introduction of new CGM options, including the Libre Rio, designed for over-the-counter use, and the Lingo system, which targets individuals who wish to monitor their glucose levels for non-diabetic health purposes.
Sales of the FreeStyle Libre products have been exceptional, contributing to Abbott Laboratories’ (NYSE:ABT) overall revenue growth. In the second quarter, the FreeStyle Libre segment reported sales of $1.6 billion, which is an impressive organic growth rate of 20.4% compared to the same quarter in the previous year.
The company has established itself as the leader in the CGM market, providing solutions to approximately 6 million patients worldwide. Management has expressed ambitions to expand the CGM portfolio significantly, with plans to achieve annual sales of $10 billion by 2028 through the introduction of Lingo and Libre Rio.
Overall ABT ranks 8th on our list of the stocks Jim Cramer is talking about before earnings. While we acknowledge the potential of ABT 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 ABT 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.