We recently compiled a list of the Jim Cramer’s Latest Game Plan: 20 Stocks to Watch. In this article, we are going to take a look at where Merck & Co., Inc. (NYSE:MRK) stands against the other stocks featured in Jim Cramer’s latest game plan.
Jim Cramer, the host of Mad Money, recently advised investors to maintain composure as major companies release their earnings this week. Additionally, he highlighted the significance of the upcoming nonfarm payroll report, set to be released on Friday, which he believes will have considerable implications for interest rates.
He said that weak hiring figures could prompt the Federal Reserve to continue cutting rates. Last Friday, Cramer noted a mixed performance in the markets: the Dow dropped by 260 points, the S&P fell slightly by 0.03%, while the Nasdaq managed a gain of 0.56%. Cramer characterized the current market conditions as a preparatory phase for an eventful week ahead, urging viewers to pay close attention.
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Cramer emphasized the importance of the employment data released on the first Friday of the month, particularly in light of the forthcoming Fed meeting.
“Speaking of employment, on the first Friday of the month, we get the nonfarm payroll report. I can’t stress how important this number is. We have an upcoming Fed meeting and we’re now seeing [that] cyclicals really missed their numbers because of higher interest rates. A lot of them are rolling over. But if employment stays as strong as it’s been, then we’re going to hear that there will be no November rate cut.”
Throughout his commentary, Cramer conveyed a clear message: while it may be tempting to sell, this period aligns with a cycle of Fed rate cuts, suggesting that buying could be the more prudent strategy. He reminded viewers that this week feels charged with significance, likening it to a playoff atmosphere where the stakes are exceptionally high.
In his concluding remarks, Cramer said:
“Bottom line, huge week, huge opportunity. Just please remember, the first move’s been the wrong move, I’d say probably maybe, almost half the time since this earnings season began. Wait to process the numbers, listen to the conference call before you pull the trigger.”
Our Methodology
For this article, we compiled a list of 20 stocks that were discussed by Jim Cramer during his episode of Mad Money on October 25. 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 close-up of a person’s hand holding a bottle of pharmaceuticals.
Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 96
Merck & Co., Inc. (NYSE:MRK) will release its third-quarter earnings on October 31. Calling the stock too low, Cramer said:
“We get two drug stocks on Thursday too. We get Merck and Bristol Myers. This group has been castigated as the wrong place to be when the Fed’s cutting rates, the hedge fund playbook says that. I think both stocks are too low but I also know that if we get a weak employment on Friday, Merck and Bristol Myers will be two stocks that you should not have bought. So put that in a little retrospect.”
Merck (NYSE:MRK) is a prominent global healthcare company engaged in the development and marketing of a diverse range of pharmaceutical products aimed at improving human health, including treatments in areas such as oncology, vaccines, and various therapeutic fields. Among its portfolio, Keytruda stands out as the most significant product.
This cancer treatment has received approval for numerous indications and became the best-selling medicine globally in 2023, generating $25 billion in sales, which represented approximately 41.5% of the company’s total revenue. However, the U.S. patent exclusivity for Keytruda is set to expire in 2028, a critical date for the company. In response to this impending loss, the company is actively working on a subcutaneous formulation of Keytruda, targeting an estimated 50% of the patient population projected for the drug by 2028.
Furthermore, on October 23, Merck (NYSE:MRK) announced the acquisition of Modifi Biosciences for up to $1.3 billion. Modifi Biosciences is recognized for its pioneering work in the field of direct DNA modification, particularly in the development of cancer therapeutics.
Overall MRK ranks 9th on the list of stocks featured in Jim Cramer’s latest game plan. While we acknowledge the potential of MRK 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 MRK 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.