We recently compiled a list of the Jim Cramer Talked About These 8 Stocks. In this article, we are going to take a look at where Royalty Pharma plc (NASDAQ:RPRX) stands against the other stocks Jim Cramer talked about.
Jim Cramer, host of Mad Money, recently shared some investment wisdom drawn from his four decades of experience. One of the key lessons he emphasized during the show was the importance of discipline in investing. Cramer was firm on this principle, saying that no matter how much someone may love a stock or be captivated by its story, if the rules dictate that it’s time to sell, then it’s time to sell. He reminded his audience that discipline is more important than sheer conviction when it comes to managing investments.
“We’re gonna start with the first one, which is bulls make money. Bears make money. Pigs, well, they get slaughtered. Look, I say this all the time… because so often in my business, I’ve seen moments where stocks went up and up and up so much that people were intoxicated with their gains… However, it’s precisely at that point of intoxication that you need to remind yourself that you don’t want to act like a pig.”
READ ALSO Jim Cramer’s Latest Lightning Round: 8 Stocks in Focus and Jim Cramer Discussed These 11 Restaurants and Retail Stocks
Cramer also stressed that one of the toughest aspects of investing is simply enduring the ups and downs of the market.
“You know that’s the hardest part of investing. It’s holding on through the difficult periods, taking short-term pains so you can have long-term gains, which is what’s happened in the stock market for a century.”
The next rule Cramer shared revolves around the fear of paying taxes on stock market gains. He pointed out that many investors develop a near-obsessive aversion to paying taxes and often avoid taking profits because they don’t want to incur tax liabilities. However, Cramer argued that it’s perfectly okay to pay taxes if it means securing gains.
Lastly, Cramer advised against buying or selling a stock all at once. He recommended spreading purchases over time in stages, as this approach accounts for the potential fallibility of judgment and helps secure the best price.
“… My next commandment and this is a really important one. Never buy all at once. I can’t stress it enough. Do not, under any circumstances, buy your whole position at once… and you should never sell all at once. Instead, I need you to stage your buys, work your orders, try to get the best price over time.”
Our Methodology
For this article, we compiled a list of 8 stocks that were discussed by Jim Cramer during the episodes of Mad Money. 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).
A scientist in a laboratory looking through a microscope, surrounded by petri dishes and beakers while researching new biopharmaceutical advances.
Royalty Pharma plc (NASDAQ:RPRX)
Number of Hedge Fund Holders: 33
While Cramer expressed disappointment with Royalty Pharma plc (NASDAQ:RPRX), he suggested holding on to the stock.
“Disappointing stock, man, I can’t believe it. Really well run, but disappointing. I don’t know what to say. I don’t know what gets it going. It’s healthcare with a great earning stream and it just doesn’t seem to matter. I want you to stick with it. I would not get rid of the stock here. It’s too good a company.”
Royalty Pharma (NASDAQ:RPRX) specializes in purchasing biopharmaceutical royalties and funding innovations within the industry, focusing on identifying, evaluating, and acquiring royalties for various therapies. Currently, 15 of the products in its portfolio generate over $1 billion in annual sales. The company has remained highly active in acquiring new royalties, and its pipeline continues to show strong potential. As of the third quarter, its capital deployment had reached approximately $2.6 billion.
In the third quarter, the company expanded its portfolio by acquiring royalties on three innovative therapies. This included synthetic royalties for two approved products: Syndax and Incyte’s Niktimvo, which treats chronic graft-versus-host disease, and Ascendis’ Yorvipath, a treatment for hypoparathyroidism. The company’s solid performance over the first nine months of 2024 prompted it to raise its full-year guidance. The strong results were attributed to the growth of its diversified portfolio, which continues to show momentum.
Royalty Pharma (NASDAQ:RPRX) now expects its Portfolio Receipts to range between $2.75 billion and $2.8 billion, an increase from the previous guidance. This update reflects an anticipated growth in Royalty Receipts of around 11% to 13%, surpassing the earlier expectation of 9% to 12%. Royalty receipts represent the company’s recurring cash inflows, which are driven by its high-quality portfolio of over 35 commercial products. Meanwhile, portfolio receipts are an important performance indicator that reflects its capacity to generate cash from portfolio investments.
Overall RPRX ranks 6th on our list of the stocks Jim Cramer recently talked about. While we acknowledge the potential of RPRX 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 RPRX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.