We recently compiled a list of the Jim Cramer’s Game Plan: 23 Stocks to Watch. In this article, we are going to take a look at where United Parcel Service, Inc. (NYSE:UPS) stands against the other stocks to watch according to Jim Cramer.
As Wall Street dives into the heart of earnings season, Jim Cramer has provided insights into market trends and earnings reports to watch in the upcoming week. Cramer remarked,
“It’s hard to believe, but this market’s now been up for six straight weeks. That’s right, despite interest rates running higher since mid-September, despite being on the verge of an election where both candidates want to pile on trillions of dollars of debt to an already unfathomable amount of borrowing, this market seems like it can’t help itself from going higher.”
Cramer highlighted the influence of the Federal Reserve, noting that ever since the rate cut on September 18, the market has largely trended upward. He emphasized that it is not solely the Fed driving this bullish sentiment, the earnings season has brought some remarkable quarterly results. With strong performance from banks kicking off the earnings cycle, Cramer posed the question of whether the rally could extend into a seventh consecutive week, suggesting following his game plan to assess this possibility.
On a separate note, addressing economic indicators, Cramer warned that if the economy continues to produce solid numbers, the likelihood of substantial rate cuts will diminish. While he believes that rates will eventually decline, he cautioned those shorting Treasurys, suggesting that they may be making a mistake.
Cramer noted a significant caveat, which is the upcoming election, and pointed out that both candidates are advocating potentially inflationary policies.
“Both candidates have pushed potentially inflationary policies. As I said at the top, if Trump can win enough of a majority to pass his huge tariffs, or Harris expands housing tax credits and de facto subsidy, they could push home prices higher. Then inflation might stage a comeback. But I’m not betting on that. I think both parties are terrified of being blamed for inflation, which almost single-handedly sunk Joe Biden’s presidency. No matter what the candidates campaign on, I don’t see their allies in Congress taking any chances with inflation beyond the usual unwillingness to balance the budget.”
He concluded that those betting against Treasurys have overreached, suggesting that their efforts to counter the Fed’s policies are unlikely to end well. Cramer observed that when a large number of investors align on one side of a trade, as seen currently, that group often ends up being incorrect.
Our Methodology
For this article, we compiled a list of 23 stocks that were discussed by Jim Cramer during his episode of Mad Money on October 18. 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).
A warehouse filled with boxes of parcels, symbolizing the companies reliable logistics services.
United Parcel Service, Inc. (NYSE:UPS)
Number of Hedge Fund Holders: 44
Cramer recently discussed United Parcel Service, Inc. (NYSE:UPS) as the company passed his YEV stocks criteria. We explained what the YEV criteria are and more in our article, Jim Cramer’s Exclusive List of 9 YEV Stocks. Here’s what Cramer said on October 18:
“Could this be the quarter that gets UPS out of its funk? It’s possible. And that almost 5% yield might cushion the blow if something goes wrong.”
United Parcel Service (NYSE:UPS) is a prominent package delivery and logistics company, known for its extensive range of services, which include transportation, distribution, contract logistics, and various freight solutions. In September, it announced the acquisition of Frigo-Trans and its sister company BPL, both recognized leaders in healthcare logistics based in Germany.
While the financial details of the transaction were not disclosed, these companies bring significant expertise in managing complex healthcare logistics, including a network of temperature-controlled warehousing spanning six temperature zones and a comprehensive cold chain transportation solution across Europe. The acquisition is expected to improve the company’s capabilities in meeting the growing demands of healthcare customers who require efficient handling of temperature-sensitive and time-critical shipments.
Kate Gutmann, UPS’s Executive Vice President and President of International, Healthcare and Supply Chain Solutions, noted that the rapid advancements in the pharmaceutical industry are driving the need for integrated cold and frozen supply chains. She emphasized that Frigo-Trans will expand the company’s solution offerings and support the company’s ambition to become the leading provider of complex healthcare logistics globally.
On October 10, Wells Fargo raised the price target on United Parcel Service (NYSE:UPS) to $142 from $134 and kept an Overweight rating. Ahead of the third-quarter earnings report, the firm made slight adjustments to its estimates for the fourth quarter but kept its outlook for the third quarter positive. The firm observed favorable trends for the company in the third quarter, with signs of volume growth and pricing actions suggesting a pathway to achieving the company’s full-year guidance.
Overall UPS ranks 17th on Jim Cramer’s list of stocks to watch. While we acknowledge the potential of UPS 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 UPS 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.