In this article, we will take a look at the Jim Cramer recommends selling these 10 stocks. To see more such companies, go directly to Jim Cramer Recommends Selling These 5 Stocks.
The US stock market remained highly resilient throughout the year 2023. Most of the gains posted by stocks were due to the AI-led rally that infused a strange optimism in the broader markets. Almost every other financial commentary and analysis points to the concentration of value and stock gains pattern in the US stock market where just a handful of stocks were responsible for most of the gains in the stock market this year. Analysts at the Lombard Odier Group said in their 2024 market outlook report that the concentration of stock markets gains is causing many analysts to draw parallels between the state of the market today and market crashes of the past where just a handful of stocks were causing a distortion of reality as everyone was thinking the market is going up but in reality most of the stocks were going down. The Swiss banking firm however said that it does not believe the concentration of stock market gains is a sign that the market has peaked. The firm then makes three cases for 2024. Its base case assumes that inflation will continue to cool down in 2024 while real GDP growth will also moderate. In this case the firm does not expect a recession. It said:
“While any decline in economic growth inevitably puts pressure on corporate profits, such an environment should also offer some relief in the form of interest rate cuts by the Federal Reserve towards the end of 2024, and as such we expect the price-to-earnings ratios to stay around their current levels.
We see this as a typical late-economic-cycle environment for equities, and US valuations as elevated but no longer outright expensive. While not a metric that we believe offers much guidance over the short term, after the market declines of recent weeks, price-to-earnings ratios are close to their ten-year averages. From a sector perspective, we believe that the energy and consumer staples stand to benefit. We also increasingly like the technology sector, which if growth holds up, remains relatively attractive thanks to the influence of AI, Cloud storage, the Internet of Things and the deeply-ingrained digitalisation of our working and private lives.”
Lombard Odier’s second case for 2024 assumes that the economy would enter a recession. In that case the firm expects earnings to fall by 20%. It says that while recession in 2023 did not materialize and recession risks have reduced, we are not out of the woods yet. The firm said that should the economy enter a recession in 2024, the Fed would begin to ease its monetary policy, causing the S&P 500 to gain near the end of the year.
The third case painted by Lombard Odier assumes the economy will keep growing, driven by manufacturing activity. The firm cited the ISM purchasing manufacturers index (PMI) contraction in September which was at its slowest pace in ten months for this possibility. However, the firm said that if the economy continues to grow and the Fed does not keep raising interest rates, inflation might remain sticky and the Fed could keep doors open to further rate hikes. In that case the firm advises against investing in sectors that are negatively impacted due to higher costs of borrowing, such as telecommunications, utilities, or real estate.
Our Methodology
For this article we saw several programs of Jim Cramer aired on CNBC this year and picked stocks Cramer either categorically recommended investors to sell or those which he’s strongly bearish on and advises his followers to stay away from. Some famous names Jim Cramer is bearish on include AT&T Inc. (NYSE:T), Verizon Communications Inc. (NYSE:VZ) and Plug Power Inc. (NASDAQ:PLUG).
Jim Cramer Recommends Selling These 11 Stocks
10. Icahn Enterprises L.P. (NASDAQ:IEP)
Number of Hedge Fund Holders: 2
Answering a question about Icahn Enterprises L.P. (NASDAQ:IEP) during a program in August, Cramer called the company a “mess” and said he has no idea how this company makes its money. Cramer thinks Icahn Enterprises L.P. (NASDAQ:IEP) is “opaque” and recommended investors to “stay away” from the stock.
In June Cramer had said the following about the Carl Icahn-led company:
“Too dangerous, too dangerous for me. It doesn’t matter, it’s too dangerous for me. I want to see more information, I’m not really sure what’s in it. I don’t like that.”
Like IEP, Jim Cramer is bearish on AT&T Inc. (NYSE:T), Verizon Communications Inc. (NYSE:VZ) and Plug Power Inc. (NASDAQ:PLUG).
9. VinFast Auto Ltd (NASDAQ:VFS)
Vietnam-based automotive company VinFast Auto Ltd (NASDAQ:VFS) ranks 10th in our list of the stocks Jim Cramer recommends selling. The stock has lost a massive 80% over the past six months.
A couple of months ago Jim Cramer said during his program that VinFast Auto Ltd (NASDAQ:VFS) was not a “company you want to be involved with.” Cramer said that he does not like anything about VinFast Auto Ltd (NASDAQ:VFS) and they don’t have a “lot of cars.” He recommended investors to stay away from the stock.
Cantor Fitzgerald’s Andres Sheppard disagrees with Cramer. The analyst and his team recently started covering VinFast Auto Ltd (NASDAQ:VFS) with an Overweight rating and a price target of $7.
“With the stock down ~46% year-to-date, we believe this to be a good entry-point for investors who are comfortable taking on volatility,” Cantor Fitzgerald’s analyst said.
8. Fisker Inc. (NYSE:FSR)
Number of Hedge Fund Holders: 11
Earlier this year a caller during a CNBC program asked Cramer about his thoughts on Fisker Inc. (NYSE:FSR). “No” was Cramer’s instant reply. Cramer said Fisker Inc. (NYSE:FSR) is “more of a charity.”
In another program Cramer said the following about Fisker Inc. (NYSE:FSR):
“Like the car, sell the stock.”
7. Plug Power Inc. (NASDAQ:PLUG)
Number of Hedge Fund Holders: 20
Jim Cramer has been advising investors to stay away from Plug Power Inc. (NASDAQ:PLUG). Earlier this year he said the following about Plug Power Inc. (NASDAQ:PLUG) on CNBC:
“I think the only way you’d be able to plug in is if you think someone’s going to engineer a short squeeze here, and I’ve got to tell you, that is not a good reason to own a stock. Those numbers were terrible, I say stay away.”
6. National Fuel Gas Company (NYSE:NFG)
Number of Hedge Fund Holders: 26
Earlier in November Jim Cramer said during his program on CNBC that he does not “like” National Fuel Gas Company (NYSE:NFG).
“I don’t like National Fuel Gas, it doesn’t pay enough, doesn’t have the growth that I want…”
National Fuel Gas Company (NYSE:NFG) has lost about 16% year to date through November 11.
As of the end of the second quarter of 2023, 26 hedge funds out of the 910 funds tracked by Insider Monkey reported owning stakes in National Fuel Gas Company (NYSE:NFG). The biggest stakeholder of National Fuel Gas Company (NYSE:NFG) was Mario Gabelli’s GAMCO Investors which owns a $60.6 million stake in the company.
Heartland Value Fund made the following comment about National Fuel Gas Company (NYSE:NFG) in its Q3 2023 investor letter:
“Utilities. National Fuel Gas (NYSE:NFG) is another existing holding we added to in the quarter. NFG is an energy company, with regulated utility assets, involved in the production, transportation, and distribution of natural gas. The stock’s correlation with natural gas prices has been high, so it wasn’t too surprising when the stock fell as natural gas prices declined following last year’s benign winter.
But prices are expected to rebound in the coming months now that the supply issue has been addressed with the steep drop in oil gas rig counts. Demand is also set to improve starting in 2025 with the onset of more U.S. liquefied natural gas (LNG) exports. Meanwhile, this is a well-run business with a track record of financial soundness. NFG, for instance, has raised dividends for 53 consecutive years because of the consistent cash flow generation from its midstream and utility segments.
Yet, when looking at valuations, we see a disconnect. NFG is trading at a 20% discount to its historical valuations compared with traditional oil and gas exploration and production stocks. The relative premium it typically garners is a function of the company’s ability to leverage its pipeline infrastructure to capitalize on higher natural gas prices and the stability of non-energy cash flows. We are positioning the portfolio to take advantage of this opportunity.”
Like AT&T Inc. (NYSE:T), Verizon Communications Inc. (NYSE:VZ) and Plug Power Inc. (NASDAQ:PLUG), National Fuel Gas Company (NYSE:NFG) is one of the stocks Jim Cramer is bearish on.
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Disclosure: None. Jim Cramer Recommends Selling These 10 Stocks is originally published on Insider Monkey.
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