We recently compiled a list of the Jim Cramer’s Best Performers List: Top 10 Stocks. In this article, we are going to take a look at where Rocket Lab USA, Inc. (NASDAQ:RKLB) stands against the other stocks on Jim Cramer’s list of best performers list.
On Wednesday’s Mad Money episode, Jim Cramer took a deep dive into ten stocks, each worth over $1 billion, that have seen significant growth this year. While acknowledging that many of these stocks are speculative, he emphasized that they still hold potential as smart investments.
Cramer suggested that when looking back on this year, two trends will stand out: a steady rise in the S&P 500, and a series of moves that initially seemed almost magical, but were grounded in reality.
Cramer also reflected on the common investment approach of sticking with index funds, noting that it is a popular strategy because it requires minimal effort. But, according to him, simply parking your money in an index fund might not be the best way to maximize returns. Instead, he argued that investors should consider individual stocks with unique characteristics, many of which are speculative since they offer opportunities for much larger gains.
Cramer criticized the tendency among experts to dismiss individual stock investments beyond index funds, saying:
“Far too often we become snobs when we talk stocks. So many experts think that if you venture past the index, you could fall off some sort of intellectual cliff. It makes any gains null and void. It’s as if the huge swath of points you could have gained simply don’t count. But that, people, is nonsense.”
READ ALSO Jim Cramer on Microsoft and Other Stocks and 10 Stocks on Jim Cramer’s Radar
During Wednesday’s episode, Cramer highlighted several stocks that have surged by over 200% this year, choosing to focus only on those with a market cap of more than $1 billion. He did clarify, however, that he was not endorsing these stocks, especially given how much they have already appreciated. Instead, his point was that speculative stocks, despite their volatility, have a valid place in an investment portfolio.
While they come with risks, a small stake in one of these stocks could outperform a much larger investment in an index fund. For Cramer, it is not about avoiding speculative stocks altogether, but recognizing their potential when balanced alongside more stable investments like index funds.
Cramer wrapped up by stressing the importance of considering these high-flying, speculative stocks and said:
“The bottom line: Let’s remember this list of frothy stocks and think of them the next time you’re about to ignore a stock for being too speculative because these names are often the epitome of speculating wisely, which can be the key for terrific long-term performance, of course, only when melded with index funds.”
Our Methodology
For this article, we compiled a list of 10 stocks that were discussed by Jim Cramer during the episode of Mad Money on November 13 and listed the stocks in the order that Cramer mentioned them.
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 launch pad atop a grassy hill, smoke filled sky from a successful voyage to space.
Rocket Lab USA, Inc. (NASDAQ:RKLB)
Cramer noted Rocket Lab USA, Inc.’s (NASDAQ:RKLB) revenue growth and its expanding satellite business.
“First: Last night was a tremendous night for wealth creation, including the outstanding gains from Rocket Lab. That’s a soup-to-nuts space company. It’s been putting up a plethora of satellites that will only grow exponentially over time. They just reported 55% revenue growth with a $1.05 billion backlog. I got asked about this one all the time in the lightning round, you know that. I’m calling it accessible because you could’ve listened to our callers and you would’ve bought it. In today’s run, that darn thing’s up over 240% for the year.”
Rocket Lab (NASDAQ:RKLB) provides launch services, spacecraft design and manufacturing, and on-orbit management solutions for the space and defense industries, including its Electron and Photon rockets, as well as developing the Neutron launch vehicle.
Its shares were up after it reported third-quarter earnings on Tuesday. It reported sales of $104.8 million, alongside a loss of $0.10 per share. Additionally, in the quarter, the company secured $55 million in new contracts for Electron launches.
Rocket Lab’s (NASDAQ:RKLB) financial outlook for the fourth quarter shows significant growth, with projected revenue between $125 million and $135 million, which would represent a substantial increase from last year’s Q4 revenue of just under $60 million. Furthermore, the company has committed to providing even more launch services through its Neutron vehicle, which is designed to cater to medium-lift needs. Although the specific customer for these future launches has not been disclosed, the agreement reflects the company’s continued expansion into larger-scale launch services.
Overall RKLB ranks 1st on Jim Cramer’s list of the best performing stocks. While we acknowledge the potential of RKLB 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 RKLB 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.