Jim Cramer kicked off 2024 with an observation that the market might be undergoing a rotation where investors are taking profits from major mega-cap tech stocks and pouring these profits into the laggards of 2023 like banks, healthcare and consumer companies.
What Jim Cramer's 'Crystal Ball' Says About 2024
Jim Cramer said that according to his "crystal ball," investors this year would take profits selling "best of the best" and invest in companies that "haven’t gotten respect for ages." By best of the best Cramer meant the Magnificent Seven group of stocks like Apple Inc (NASDAQ:AAPL), Amazon.com Inc (NASDAQ:AMZN) and NVIDIA Corp (NASDAQ:NVDA) and "richly valued" software companies.
Cramer talked about his early days in the Wall Street where the beginning of every new year would bring excitement and enthusiasm among investors that caused "repositioning" in the market. Cramer said that most of the times this repositioning is temporary and does not have a lot of importance in the long run. Cramer said that some circles believe the Magnificent Seven group of stocks won't be able to sustain their rally. Cramer said he reluctantly agrees with this notion but long-term investors should approach these sell-offs as buying opportunities.
"A Heck With These Traders"
Cramer predicted that 2024 markets would be defined by what the Fed does about inflation as traders will keep looking over their shoulder for the next inflation report and Jerome Powell's comments. But Cramer advised his viewers to "don’t be one of those people," referring to investors who impulsively react to any "utterances" from the Fed, traders, economists or politicians about the stock market.
Cramer expressed his frustration with this short-term, reactive investing approach and said:
"Me? I say a heck with these traders."
Cramer Says AI and Software Bubbles Will Pop
Jim Cramer said during beginning of every new year investors usually sell stocks that perform extremely well in the previous year and invest their money into beaten down stocks. But that trend changes after earnings season begins and investors come back to top performers of the previous year. Jim Cramer predicted that the artificial intelligence and enterprises software "bubbles will be popped." But once these stocks come back to reasonable valuations compared to other stocks they will once again be bought, Cramer thinks.
Jim Cramer went through different sectors to weigh options for investors. For the healthcare sector, Cramer said "no thank you" since he believes healthcare stocks do not perform well during election years. For retail, Cramer said these companies are "finally getting their arms around the shoplifting problem" and could produce better returns. For the oil industry, Cramer said "very difficult" since "we produce so much crude in this country" that it's hard for oil prices to go higher.
Wait for the Sell-Off and Then Do "Some Buying"
Jim Cramer said he told his investing club members that they'll be "rewarded" if they bought stocks with decent valuations, not dramatically expensive when compared to average S&P 500 multiples. Cramer said investors should be patient and wait for the sell-off he's expecting and then do "some buying."
Jim Cramer's 2024 Predictions and Top 10 Stock Picks
Methodology
For this article we saw several latest programs of Jim Cramer aired on CNBC during early January and picked 11 stocks he's bullish on.
Talking about robotics warehouse automation company Symbotic Inc (NASDAQ:SYM), Jim Cramer recently said during his program that he likes "real AI" that helps companies make money and not the AI that is just for press releases. Cramer said Symbotic Inc (NASDAQ:SYM) is using real AI for their business and he likes the stock.
As of the end of the third quarter of 2023, 12 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Symbotic Inc (NASDAQ:SYM).
In addition to SYM, Jim Cramer is also bullish on Apple Inc (NASDAQ:AAPL), Amazon.com Inc (NASDAQ:AMZN) and NVIDIA Corp (NASDAQ:NVDA).
Recently, a caller asked Jim Cramer whether or not should he stay invested in Realty Income Corp (NYSE:O). Cramer recommended the investor to stay with the stock as he praised Realty Income Corp's (NYSE:O) 5% yield. Cramer said that Realty Income Corp (NYSE:O) is a very "steady story."
"I love monthly dividends and I love steady stories."
As of the end of the third quarter of 2023, 23 hedge funds out of the 910 hedge funds tracked by Insider Monkey had stakes in Realty Income Corp (NYSE:O). The most notable hedge fund stakeholder of Realty Income Corp (NYSE:O) during this period was Dmitry Balyasny's Balyasny Asset Management which owns a $41 million stake in Realty Income Corp (NYSE:O).
When asked about Topgolf Callaway Brands Corp (NYSE:MODG) recently on his program by a caller, Jim Cramer said he likes Topgolf Callaway Brands Corp (NYSE:MODG). Cramer said it's an "interesting, good" stock. Cramer said at $14 the stock should be a buy. As of January 11 market close the stock was trading at $14.16.
As of the end of the third quarter of 2023, 27 hedge funds out of the 910 hedge funds tracked by Insider Monkey had stakes in Topgolf Callaway Brands Corp (NYSE:MODG). The most notable hedge fund stakeholder of Topgolf Callaway Brands Corp (NYSE:MODG) during this period was Paul Marshall and Ian Wace's Marshall Wace LLP which owns a $42 million stake in Topgolf Callaway Brands Corp (NYSE:MODG).
In November, Topgolf Callaway Brands Corp (NYSE:MODG) CAO Jennifer Thomas bought 4,000 shares of Topgolf Callaway Brands Corp (NYSE:MODG) worth $40,080. In December, Laura Jean Flanaga, a director at Topgolf Callaway Brands Corp (NYSE:MODG), bought 2,000 company shares at $12.62.
TimesSquare Capital U.S. Small Cap Growth Strategy made the following comment about Topgolf Callaway Brands Corp. (NYSE:MODG) in its Q3 2023 investor letter:
“Slipping by -30% were the shares of Topgolf Callaway Brands Corp. (NYSE:MODG), which manufactures golf equipment and accessories, as well as operates entertainment venues. Revenues were shy of expectations because recent wildfires in Canada led to temporary closures of Topgolf locations there. However, the company’s equipment sales showed larger-than-expected volumes and recent golf industry data indicated higher activity levels.”
Answering a question about Arm Holdings PLC - ADR (NASDAQ:ARM), Jim Cramer recently said that Arm Holdings PLC - ADR (NASDAQ:ARM) CEO Rene Haas is doing a "fantastic job." Cramer said some circles have sounded skepticism around the stock amid weakness in cell phone and PC business.
Cramer said that this company is doing "so much so right, they are going to dominate cell phone, PC, hyperscale."
Cramer said he'd want to buy Arm Holdings PLC - ADR (NASDAQ:ARM) for his charitable trust.
As of the end of the third quarter of 2023, 35 hedge funds out of the 910 funds tracked by Insider Monkey reported having stakes in Arm Holdings PLC - ADR (NASDAQ:ARM). The biggest hedge fund stakeholder of Arm Holdings PLC - ADR (NASDAQ:ARM) doing this period was
Earlier this month, Jim Cramer called GE HealthCare Technologies Inc (NASDAQ:GEHC) a "ridiculously cheap" stock. Cramer said GE HealthCare Technologies Inc (NASDAQ:GEHC) is doing "so many great things." The analyst also said that when the stock was at $66 "a guy" downgraded the stock but Cramer said he'd recommended "Buy, Buy, Buy" on the stock.
Cramer also said that his Charitable Trust has a "big position" in the stock and he's sticking with the GE HealthCare Technologies Inc (NASDAQ:GEHC) stock for the "long haul."
A total of 41 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in GE HealthCare Technologies Inc (NASDAQ:GEHC).
Sound Shore Management made the following comment about GE HealthCare Technologies Inc. (NASDAQ:GEHC) in its Q3 2023 investor letter:
“That said, current macro factors of higher inflation, rising rates, and a slowing economy are affecting stock prices in the short-term. Against this backdrop, many consumer stocks and financing-based business models declined in the third quarter. For example, GE HealthCare Technologies Inc. (NASDAQ:GEHC) was our largest detractor for the period. A recent spinout from GE, the company is the world’s largest medical imaging supplier with steady growth and higher margins. We purchased the stock in the first quarter of 2023 when it was trading at 14 times normalized earnings, a significant discount to peers. Our research concluded that GEHC’s profit margins were temporarily depressed due to the spinoff and one-time Research & Development charges, and that management’s plan for improvement was credible. The stock got off to a strong start early in the year, but returned the bulk of its gains as higher borrowing rates for their customers created demand uncertainty. As well, 15% of GE Healthcare’s business is from China, where demand has slowed along with the economy. We view these headwinds as temporary, and added to our position during the stock’s recent pullback.”
Jim Cramer was excited about aerospace-related engineering services company Howmet Aerospace Inc (NYSE:HWM) recently. A caller asked Jim Cramer whether the decision to move away from Boeing (after the latest disasters) and investing in Howmet Aerospace Inc (NYSE:HWM) was right. Cramer said this is the "right call" and praised the stock.
"What a stock Howmet is," Cramer said.
Like Apple Inc (NASDAQ:AAPL), Amazon.com Inc (NASDAQ:AMZN) and NVIDIA Corp (NASDAQ:NVDA), Cramer is bullish on HWM.
