Jim Cramer Recommends Selling These 10 Stocks in August
In this article, we discuss the 10 stocks Jim Cramer recommends selling in August. If you want to read more about other stocks Jim Cramer recommends selling, go straight to Jim Cramer recommends selling these 5 stocks in August.
Jim Cramer, the former hedge fund manager and current host of CNBC's Mad Money, has come under fire in recent weeks after predicting in May that investors should factor "peak inflation" into their market decisions. Cramer pointed to inflated inventories to get his point across, and drew ridicule from news outlets like the Financial Times, who noted that financial indicators at the time did not support his views. In the weeks since, however, US consumer price inflation has slowed.
Well-known growth stocks that have been battered by rising inflation, such as Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Alphabet Inc. (NASDAQ:GOOG), are beginning to recover well. However, the market is not out of the woods yet. Cramer has hailed peak inflation as "nirvana for stocks" during his recent show, as have fast-growing tech companies, or the financials or consumer discretionary names. He added that "a peak in inflation could help stocks rise even during an economic slowdown."
Cramer has also discussed the performance of some of the market's COVID winners, which he believes have shown their "strength and resilience" in the face of difficult conditions, and advised investors to hold on to these stocks. The journalistic investor has also highlighted the stocks that he believes will not benefit from the new developments. Cramer believes that "inflation isn't tamed yet, but it's tamer" and this can break the old pattern of market 'drops the day after each rally' as confidence returns.
These were chosen in light of the recent calls Cramer made about these stocks on his CNBC show Mad Money. An extensive database of around 900 elite hedge funds tracked by Insider Monkey in the first quarter of 2022 was used to determine each stock's popularity with hedge funds.
Jim Cramer recommends selling these 10 stocks in August
Jim Cramer recommends selling these stocks in August
10. Alibaba Group Holding Limited (NYSE:BABA)
Number of hedge fund holders: 100
Alibaba Group Holding Limited (NYSE:BABA) is a diversified technology company. During the Lightning Round of his show on Aug. 9, when asked by viewers about his views on Alibaba Group Holding Limited (NYSE:BABA), Cramer made it clear that he does not recommend Chinese stocks in the current market environment. Cramer even went so far as to say he's "digested" Chinese stocks because "they break your heart too often." The comments served to highlight its bearish call for the stock.
On August 8, Deutsche Bank analyst Leo Chiang kept a buy rating on Alibaba Group Holding Limited (NYSE:BABA) stock and raised the price target to $160 from $155, noting that a faster than expected reduction in losses on new initiatives helped the company hit a profit.
Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Alibaba Group Holding Limited (NYSE:BABA ).
Along with Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Alphabet Inc. (NASDAQ:GOOG), Alibaba Group Holding Limited (NYSE:BABA) is one of the stocks that are attracting elite investors prefer monitor.
In its Q1 2022 letter to investors, Longleaf Partners Fund, an asset management company, highlighted a few stocks, and Alibaba Group Holding Limited (NYSE:BABA) was one of them. Here's what the fund said:
“We have taken advantage of price volatility to add to three of our most heavily discounted European companies, including new purchases in Q4 2021, and we have initiated a position in Alibaba Group Holding Limited (NYSE:BABA) as shares are discounted even more amidst them became broad China volatility over the period.”
9. Dropbox, Inc. (NASDAQ: DBX)
Number of hedge fund holders: 44
Dropbox, Inc. (NASDAQ:DBX) owns and operates a content collaboration platform. Cramer gave the stock a sell rating during the blitz round of his Aug. 9 show. Responding to a viewer question about the content platform, the journalist investor said "nothing is happening to the stock" and was quick to clarify that it's not a good stock thing and he would recommend investors to "skip" the option to buy the shares .
In late May, Jefferies analyst Brent Thill maintained a buy rating on Dropbox, Inc. (NASDAQ:DBX) and lowered its price target to $30 from $35, noting that the company, along with the rest of the software sector, is facing macroeconomic conditions faced a headwind.
At the end of the first quarter of 2022, 44 hedge funds in Insider Monkey's database held shares of Dropbox, Inc. (NASDAQ:DBX) worth $814 million, up from $843 million in the prior quarter.
In its Q3 2021 Investor Letter, RGA Investment Advisors LLC, an asset management company, highlighted a few stocks and Dropbox, Inc. (NASDAQ:DBX) was one of them. Here's what the fund said:
"Dropbox really let us down this quarter, not because they did anything wrong, but because throughout our tenure that we've held this stock, during periods when long-duration (aka higher growth) were sold out, outperformed. Not this time. Despite people claiming this market split is all about selling growth and buying value, Dropbox stock endured one of its worst stock market quarters in years. It's hard to pinpoint a specific reason, though there's a story out there about how some investors thought the company might raise the bar on its target 30% operating margin if it hits those numbers. Along with the company's earnings report, rather than raising the bar, they explained that there is more room to grow margin, but in the meantime the company prefers to invest the potential surpluses to drive further growth.
This year, the company will have repurchased almost 9% of its diluted outstanding shares (perhaps more given its Q4 trajectory in shares) and delivered a free cash flow yield of over 7.5% on its year-end share price while it's up grows by 12%. It's a strong recipe for stellar returns, but in a market theoretically looking for cash flow, the stock has been penalized. We think this is one of the silliest moves of all, and find Dropbox to be a particularly compelling opportunity for 2022. Revenue is certainly growing as the company continues to withstand competition from Microsoft, Google, and Box. Plus management continues to make smart tuck-in acquisitions, demonstrating what may prove to be a scalable, repeatable recipe for deepening relationships with existing customers, thereby reducing churn and setting the stage for continued ARPU growth. This potential strategy started with HelloSign and will be further validated with the acquisition of DocSend…” (Click here for full text)
8. MannKind Corporation (NASDAQ:MNKD)
Number of hedge fund holders: 19
MannKind Corporation (NASDAQ:MNKD) is a biopharmaceutical company. On August 3, Cramer discussed his stance on the company during his show's lighting session. Responding to a viewer question, the former hedge fund manager said that "nobody ever likes it when I say something bad about MannKind," and asked what would happen if the company was "not a good company." He added that it was important to him and he would recommend selling the stock.
MannKind Corporation (NASDAQ:MNKD) on Aug. 9 reported earnings for the second quarter of 2022 and reported losses per share of $0.11, missing market estimates by $0.02. Revenue for the period was $18.8 million, down nearly 19% year over year.
At the end of the first quarter of 2022, 19 hedge funds in Insider Monkey's database held shares of MannKind Corporation (NASDAQ:MNKD) worth $61 million, compared with 12 holding $58 million in the previous quarter.
7.Canoo Inc. (NASDAQ:GOEV)
Number of hedge fund holders: 19
Canoo Inc. (NASDAQ:GOEV) is a California-based company that manufactures and sells consumer and commercial electric vehicles. Cramer gave the stock a sell rating during the Lightning Round of his show in early August. In response to a viewer question about the company, the former Goldman Sachs money manager said that electric vehicle stocks only lose money, noting that Canoo is one of them and he's "just done with stocks that lose money," specifically in the present marketplace.
On August 9, Roth Capital analyst Craig Irwin downgraded Canoo Inc. (NASDAQ:GOEV) stock to neutral from buy and lowered its price target to $3.5 from $7, noting that that the company posted an unexpectedly large loss in the second quarter.
At the end of the first quarter of 2022, 19 hedge funds in Insider Monkey's database held shares in Canoo Inc. (NASDAQ:GOEV) worth $9 million, compared with 18 holding $29 million in the previous quarter.
6. 23andMe Holding Co (NASDAQ:ME)
Number of hedge fund holders: 19
23andMe Holding Co. (NASDAQ:ME) is a consumer genetic testing company. During his show's Lightning Round on Aug. 9, Cramer outlined his bearish forecast for the stock in response to a viewer question about the company. Cramer noted that he even had the company's CEO on his show and told him the same thing, that the stock "didn't have a mojo." He clarified that this is a tactical term used in the financial world for stocks that went absolutely nowhere.
In late May, Citi analyst Daniel Grosslight maintained a neutral rating on 23andMe Holding Co. (NASDAQ:ME) stock and lowered its price target to $3 from $6, noting that the company is in a tough spot , since there is no way to have a unique good.
At the end of the first quarter of 2022, 19 hedge funds in Insider Monkey's database held shares in 23andMe Holding Co. (NASDAQ:ME) worth $71 million, compared with 13 holding $32 million in the previous quarter.
Along with Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL) and Alphabet Inc. (NASDAQ:GOOG), 23andMe Holding Co. (NASDAQ:ME) is one of the hedged equity funds keeping a close eye .
To read on, click here to see Jim Cramer recommends selling these 5 stocks in August.
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disclosure. none. Jim Cramer Recommends Selling These 10 Stocks in August was originally published on Insider Monkey.
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