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 General Motors Company (NYSE:GM) 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 group of technicians in a garage, inspecting car parts and ensuring safety compliance.
General Motors Company (NYSE:GM)
Number of Hedge Fund Holders: 72
Cramer has highlighted General Motors Company’s (NYSE:GM) substantial buyback program and praised the CEO, Mary Barra.
“In the morning, we have General Motors, one of the cheapest stocks in the entire S&P 500. The traders believe GM’s future earnings will collapse or would not have such a low price-to-earnings multiple, PE multiple. I think it’s a bargain, even as it may be hurt by tariffs on Mexican-made cars if Donald Trump wins in November.”
General Motors (NYSE:GM) develops, manufactures, and markets a wide range of vehicles, including trucks, crossovers, cars, and vital automotive components. On October 13, it was reported that Republican U.S. presidential candidate Donald Trump suggested the possibility of imposing tariffs exceeding 200% on vehicles imported from Mexico. In an interview, he expressed intentions to prevent the sale of cars from Mexico into the United States, stating, “I’ll put a number where they can’t sell one car.”
Reuters reported on October 16 that the company and Taiwanese tech giant Foxconn, plan to transition production from Asia to Mexico, a move highlighted by the nation’s deputy economy minister.
Additionally, on October 10, General Motors (NYSE:GM) reported significant progress in the Chinese market, with deliveries exceeding 426,000 vehicles in the third quarter of 2024. It was a sequential growth rate of 14.3%, the highest since the third quarter of 2022.
Additionally, sales of new energy vehicles, which include battery electric vehicles and plug-in hybrids, surpassed those of internal combustion engine vehicles for the first time in China. With over 224,000 units delivered, new energy vehicles constituted 52.7% of the company’s total Q3 deliveries in the region, which was a remarkable 60.7% increase year-on-year.
Overall GM ranks 6th on Jim Cramer’s list of stocks to watch. While we acknowledge the potential of GM 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 GM 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.