We recently compiled a list of the Jim Cramer Talked About These 11 Stocks Recently. In this article, we are going to take a look at where Merck & Co., Inc. (NYSE:MRK) stands against the other stocks Jim Cramer recently talked about.
On Thursday, Jim Cramer, host of Mad Money, discussed the current state of the market following the election, noting that it has been marked by extreme volatility, with some sectors experiencing massive gains while others have faced significant losses. Cramer observed a recurring pattern in the market:
“When it’s loved in this market, it’s really loved, but when it’s hated, I mean just forget about it. That’s been the dynamic ever since the election.”
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Cramer identified certain industries that have seen notable growth, explaining that these sectors have thrived for specific reasons. However, he cautioned that investors should be wary of jumping in too quickly, as these stocks need time to cool off before they become attractive again. In particular, he mentioned how companies with subscription-based models have been seeing a lot of attention, largely because of their steady revenue streams.
Another sector Cramer highlighted as being in the midst of a strong rally is enterprise software. He explained that companies in this space, particularly those providing essential products to large corporations, have been soaring.
While some sectors are riding high, Cramer also pointed to two areas that are currently undervalued but could see a rebound: pharmaceuticals and semiconductors. He speculated that the pharmaceutical sector has been dragged down in part due to concerns over Robert F. Kennedy Jr.’s controversial appointment as the head of the Department of Health and Human Services. However, Cramer suggested that these concerns may already be priced into the stocks.
Similarly, Cramer noted that semiconductor stocks have struggled. He said that the hatred comes from doubts surrounding the adoption of artificial intelligence-powered PCs. In his closing remarks, Cramer stressed that while there are plenty of stocks that are currently over-loved, many of them genuinely deserve the attention they’re receiving, but not necessarily at their current inflated prices.
As for sectors that seem to be in a perpetual decline, Cramer said he would be interested in buying them, but only after seeing signs that they’ve stopped falling. He added that any potential rebound will depend on greater clarity from President-elect Trump, who he believes could have a significant impact on the market, particularly with his potential to cause turbulence for many stocks.
“We need to see the floor of the abyss, unless, of course, we’re bouncing off it already. And for the overly loved, don’t look for Trump for support. He can surprise you with what concerns him. Do not get too cocky. Do not get too smug. It will hurt you for certain.”
Our Methodology
For this article, we compiled a list of 11 stocks that were discussed by Jim Cramer during the episode of Mad Money on November 14 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 close-up of a person’s hand holding a bottle of pharmaceuticals.
Merck & Co., Inc. (NYSE:MRK)
Cramer mentioned that drug stocks like Merck & Co., Inc. (NYSE:MRK) are hated in the market these days and said:
“Right now, the drug stocks… are despised beyond all belief, just drop-dead despised. There seems to be no price where they’re safe. They are hated. We’re hearing that Robert F. Kennedy, Jr., big vaccine denier, will get appointed as the Secretary of Health and Human Services, which is definitely bad for Big Pharma. Maybe that’s why they’ve been going down so hard but these stocks have already been hit. I think that the hatred is almost priced in, except for the stocks of companies that sadly make vaccines. Robert F. Kennedy Jr. has not been a big fan of the vaccines, to say it mildly. Merck, with a great stable of cancer drugs, now sells for just over 10 times next year’s earnings… But these stocks are trading like Bernie Sanders just won the election on a platform of socialized medicine. These stocks are just way too hated.”
Merck (NYSE:MRK) is a leading global healthcare company focused on the research, development, and commercialization of a broad spectrum of pharmaceutical products. Its pipeline of drug development programs remains expansive, including dozens of ongoing initiatives aimed at addressing unmet medical needs.
This pipeline has been further strengthened through strategic acquisitions, such as the purchase of Acceleron Pharma in 2021. This acquisition led to the approval of Winrevair, a new treatment for pulmonary arterial hypertension.
Additionally, in the third quarter, the company acquired an innovative investigational bispecific T-cell engager from Curon, which has potential applications in both oncology and immunology, aligning with its ongoing efforts to address critical unmet needs in these fields. Merck (NYSE:MRK) has revised its full-year sales forecast to a range of $63.6 billion to $64.1 billion. The company also expects its full-year non-GAAP EPS to fall between $7.72 and $7.77.
Overall MRK ranks 9th on our list of the stocks Jim Cramer recently talked about. 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.