We recently published an article titled Jim Cramer Thinks These 13 Stocks Will Benefit From the New Administration.In this article, we are going to take a look at where Aris Water Solutions, Inc. (NYSE:ARIS) stands against the stocks that will benefit from the new administration according to Jim Cramer.
Jim Cramer, the host of Mad Money, recently raised concerns about the current state of the market, particularly highlighting what he perceives as signs of “excess”. He also examined what he referred to as "Trump trades," or stocks that Wall Street has been gravitating towards in anticipation of what President-elect Donald Trump's administration might bring.
He pointed to private prison operators and oil service companies as examples of sectors benefiting from these expectations. Focusing on oil, Cramer noted that a number of smaller oil service stocks have surged this month. He pointed out:
“Now one of the few things that we know for certain about President-elect Trump's economic agenda is that he wants our country to produce even more oil than it's doing. His new pick for treasury secretary, that's Scott Bessent, has advocated for the country to produce an incremental 3 million barrels of oil per day.”
Cramer sees this as positive news for oil service companies involved in the extraction of resources. However, he also warned that this surge in production could exert downward pressure on oil and gas prices, much like what occurred in 2016. Despite this, Cramer highlighted that the major players in oil services have posted impressive gains in November, with some smaller operators making unexpected appearances on the list of the market's hottest stocks. Shifting to the cryptocurrency market, Cramer addressed the significant rise in Bitcoin’s value. He noted:
“Now that rally is taking up practically the whole cryptocurrency ecosystem… Obviously, the gains in crypto, especially the Bitcoin ecosystem, seem excessive, but again, they aren't without reason. We're going from a Biden regime that was pretty antagonistic towards crypto to a second Trump administration that promised to be incredibly crypto-friendly.”
Cramer also pointed out that under the Biden administration, the government had been more paternalistic, aiming to regulate and control crypto, while Trump has promised a much more supportive stance towards Bitcoin. Cramer believes that a Trump administration that actively supports Bitcoin could lead to significant hoarding of the cryptocurrency, especially in the context of a strategic Bitcoin reserve.
This could benefit Bitcoin holders or “hodlers,” as they are often called in the crypto community. He also suggested that owning Bitcoin or an ETF that tracks its performance could serve as a hedge against potential inflation, particularly if the government continues to print money to address its deficit. Cramer voiced his own support for Bitcoin, saying, “call me in favor of owning Bitcoin,” and also recommended purchasing Ethereum, which he owns, despite it lagging behind Bitcoin in recent performance.
“I'm a believer, but these are hedges for me, and if you're hoarding crypto, be ready for the breakdown no one thinks can come.”
Our Methodology
For this article, we compiled a list of 13 stocks that were discussed by Jim Cramer during a recent episode of Mad Money on November 25. 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).
An industrial complex with a pillar of steam billowing from a water recycling plant.
Cramer called Aris Water Solutions, Inc. (NYSE:ARIS) profitable and mentioned that the stock’s valuation is reasonable.
“Aris Water Solutions offers water management, recycling, and supply solutions to frackers in the Permian Basin. It's up more than 63%… Once again, big moves there. I can't say they're unreasonable. These are three very profitable businesses, reasonable valuations. They're about to face a much more benign regulatory environment.”
Aris Water Solutions (NYSE:ARIS) is an environmental infrastructure company that specializes in handling and recycling produced water from oil and gas production, and operating facilities to treat, store, and recycle this water. In the third quarter, it reported strong financial results, reflecting growth in both its produced water volumes and recycled water sales. The company also maintained healthy margins during this period.
Net income for the quarter was $16.4 million, an increase from $12.2 million in the same period of 2023 and $13.1 million in the second quarter of 2024. This growth was supported by CPI-linked revenue escalation clauses in its contracts and operational cost improvements made over the past year. These factors contributed to a 13% increase in operating margins per barrel, which reached $0.45 in the third quarter of 2024, compared to the same period last year.
Aris Water Solutions (NYSE:ARIS) continues to explore additional commercial opportunities related to mineral extraction from its produced water streams. The company is currently selecting a site for an iodine extraction facility in partnership with a strategic ally. Additionally, it has been approached by companies that specialize in extracting minerals such as magnesium, ammonia, and lithium. While management expects to have more information on potential future revenues from these opportunities in 2025, no further updates have been provided at this time.
Overall ARIS ranks 9th on Jim Cramer's list of stocks that will benefit from the new administration. While we acknowledge the potential of ARIS 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 ARIS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
