We recently compiled a list of the Jim Cramer’s Latest Lightning Round: 8 Stocks in Focus. In this article, we are going to take a look at where Wells Fargo & Company (NYSE:WFC) stands against the other stocks that Jim Cramer’s focused on.
Jim Cramer, the host of Mad Money, expressed strong views regarding day trading on Friday, urging novice investors to avoid the temptation of risky market practices. His warning followed an article from The Wall Street Journal, titled “More Men Are Addicted to the ‘Crack Cocaine’ of the Stock Market,” which discussed how an increasing number of investors are developing serious gambling addictions through speculative trading. Cramer emphasized:
“Unless you’re a professional, I’m dead set against day trading, particularly the kind that is based on zero-days-to-expire or zero DTE options. These are options that expire the same day.”
He compared these trades to gambling, urging that they be stopped, as they serve no purpose other than to hook people on the addictive nature of the stock market. Cramer, who highlighted that he has moved away from day trading since retiring, stressed the importance of a more cautious and informed approach. He now advocates for “buy and homework,” his version of buy-and-hold investing, which reflects his belief that things can change with a company and require continuous evaluation.
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Cramer called for self-regulation within the industry and said:
“There’s no reason to push people into zero day options other than pure greed. The industry’s encouraging bad behavior, that’s just plain wrong.”
Cramer further pointed out that day trading is not limited to options but extends to other high-risk investments, such as cryptocurrencies, uranium stocks, and emerging technologies like quantum computing, commercial space, and future mobility stocks. While he expressed confusion over who creates these stocks, he noted that their volatility and high trading volumes indicate they are often used as vehicles for speculative trading rather than sound investments.
Cramer questioned whether the markets could eliminate this behavior, but he firmly believes that a collective value judgment can be made. He particularly criticized the brokerage houses that profit from encouraging risky behavior, stating that these firms must be held accountable for promoting an environment that feeds into people’s gambling instincts.
“After all the markets were created for investing, not day trading on the direction of stocks. There’s a big difference between making an informed investment and pure gambling.”
He called for stronger measures to protect individuals from the dangers of day trading, suggesting that, while it may be impossible to completely eliminate high-risk trades, at the very least, these products should come with warning labels. He condemned those who continue to push these high-risk options, asking whether they truly need the money so badly, and saying, “Shame on you.”
Our Methodology
For this article, we compiled a list of 8 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on December 20. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 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).
Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 72
Cramer thinks that 2025 will be a great year for Wells Fargo & Company (NYSE:WFC) and mentioned that he is a buyer of the stock.
“I like Wells Fargo right here. I think it’s gonna be a fantastic year in 2025. I would be a buyer of Wells Fargo.”
Wells Fargo (NYSE:WFC) is a prominent global financial services institution, offering a wide range of banking, investment, mortgage, and financial products. Over the past few years, the company’s earnings profile has changed significantly. This shift has led to a more diverse revenue structure. In particular, its fee-based revenue has seen a 16% increase during the first nine months of the year, helping to offset challenges faced in net interest income.
The bank continues to focus on its efficiency initiatives with expenses down from a year ago and headcount down for 17 consecutive quarters. Additionally, Wells Fargo has maintained growth in its credit card portfolio, with balances increasing for 13 consecutive quarters. The company’s management noted that after several years without growth, the number of net checking accounts has risen for three straight quarters, and management has observed an increase in the company’s share of debit cards.
In the third quarter, its mobile mobile active users grew by 1.6 million or 5% from last year. Additionally, Wells Fargo (NYSE:WFC) is also approaching a significant regulatory milestone. It is nearing the completion of tests required to lift a $1.95 trillion asset cap that was imposed on the bank in 2018 following the fake accounts scandal. As reported by Reuters on December 11, CEO Charlie Scharf expressed greater confidence in the company’s progress toward resolving its compliance issues. Scharf emphasized that detailed plans have been implemented to address regulatory requirements, and these plans are regularly reviewed by regulators.
Overall, WFC ranks 2nd on our list of stocks that Jim Cramer’s focused on. While we acknowledge the potential of WFC 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 time frame. If you are looking for an AI stock that is more promising than WFC 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.