Jim Cramer’s Monthly Investing Club Meeting Highlights

During his August meeting, Jim Cramer shared insights on several stocks that new investors might want to consider, especially as the S&P 500 hovers near record highs.

Apple

Apple’s stock has been rallying, particularly after the recent announcement of its $100 billion investment in U.S. manufacturing. This development suggests that Apple shouldn’t be overlooked. However, if a judge in the ongoing Alphabet antitrust case cancels a search agreement with a manufacturer for iPhones, Apple could face a hefty challenge. The company would then need to find a way to manage the potential $20 billion in annual payments from Alphabet. We’re sticking with our firm stance: “Preshes, Don’t Trade.”

Amazon

Amazon’s cloud service, AWS, hasn’t been growing as rapidly as anticipated, a trend evident in its second-quarter revenues. Nonetheless, we’ve maintained our position in Amazon because the demand for cloud infrastructure remains significant.

Abbott Laboratories

We’ve grown skeptical about Abbott, especially as recent revenue reports point to prolonged challenges in China. Should the stock drop further, we might reconsider our investment approach.

Broadcom

Broadcom has established itself as a key player in AI trading with its custom chips and networking solutions. The scale of AI development is enormous enough that we choose to hold steady despite some negatives. We did reduce our position on August 6th for a profit.

BlackRock

With the broader market trading high, BlackRock’s stock is positioned to benefit, particularly as financial stocks tend to thrive when assets are appreciating in value.

Bristol Myers Squibb

While there’s been rising M&A activity and a more lenient approach from regulators, it’s uncertain how this will affect Bristol Myers. Upcoming trials for its new schizophrenia drug, Covenfee, could clarify its commercial prospects, which have been uncertain after lackluster early results.

Capital One

As the economy faces challenges, Capital One may encounter significant consumer health issues. Yet, there aren’t any immediate red flags signaling credit quality problems. We’re also keeping an eye on Capital One’s recent substantial acquisition of Discover Financial.

Costco

Costco remains a solid choice during economic uncertainty because wholesale retailers tend to attract budget-conscious customers. “When times get tough, people go to Costco,” Jim noted, suggesting investors think about increasing their stake.

Salesforce

Amid discussions that “AI is eating software,” we’ve reconsidered our rating for Salesforce. Although we downgraded it, we’re not ready to exit just yet; we want to see how AgentForce contributes in future revenue reports. Also, don’t forget the typically positive impact of the upcoming Dreamforce conference.

CrowdStrike

Given the current downturn in the cybersecurity sector, now may be a good time for investors to consider CrowdStrike, despite the stock’s recent declines which don’t reflect underlying fundamentals.

Cisco Systems

We’ve added Cisco to our portfolio, eyeing its potential for growth in both AI and capital returns to shareholders. Even though it missed revenue estimates in its security segment, this hasn’t changed our stance on the stock.

Coterra Energy

Coterra hasn’t performed as expected, prompting us to maintain our current position. The market conditions affecting its revenue have posed challenges, and operational issues caught us off guard.

DuPont

DuPont’s stock has been stagnant ahead of its potential breakup, a situation referred to as “spin decoration” by some on Wall Street. While it’s uncertain when recovery will happen, it’s likely to occur sooner than later. Investors may need to buy in during dips before the split.

Danaher

We’re holding onto Danaher for potential catalysts ahead. If the IPO window opens for biotech companies, it could rejuvenate the firm, although a sharp focus on life sciences might limit options.

Disney

If you’re new to our club, consider investing in Disney. The strength of its parks, quality films, and streaming performance suggest it’s undervalued at current prices, even if not quite at $130 yet—it certainly belongs closer to $120.

Dover

Dover’s performance has been lackluster, decreasing annually by 4.5%. However, a bolder management strategy could unlock more value for investors.

Eaton

While Eaton’s recent performance hasn’t thrilled, it’s essential for members to retain their positions. The company is well-placed in sectors with long-term growth potential, though Jim suggests a split into two entities might create value more effectively.

GE Vernova

This manufacturer shows promise as demand for data center construction grows. Jim emphasized the potential for growth, but he wishes management would be more proactive in expanding turbine capacity.

Goldman Sachs

Jim considers Goldman to be one of the club’s more undervalued stocks right now, especially as Wall Street’s deal-making ramps up. An uptick in IPOs and M&A activities could bolster the firm’s investment banking revenues.

Home Depot

Although Home Depot’s stock has been underperforming, it’s a prime choice during interest rate reductions, which are likely to spur the housing market and boost Home Depot’s business.

Honeywell International

Jim strongly advocates for Honeywell to separate into three public companies, suggesting that each segment could have significantly more value than the market currently recognizes. Unfortunately, its stock performance has lagged behind the S&P 500.

Linde

Jim lauded Linde for its consistent performance across various economic conditions, as demonstrated by its track record of earnings beats. Its impressive pricing power adds to the appeal of its stocks.

Eli Lilly

After a strong signal of confidence from management and significant stock purchases, Lilly received a double-upgrade recently. While rapid ratings changes aren’t our norm, we adapt to new facts as they arise.

Meta Platforms

Consider buying Meta on a dip. The company could enhance its value if effective monetization strategies for WhatsApp come to fruition. With its robust portfolio, including Instagram and Facebook, Meta has the tools to develop another profitable advertising business.

Microsoft

Investors are encouraged to purchase Microsoft shares during any decline. The company recently reported impressive quarterly earnings, driven by robust growth in its cloud services, maintaining its foothold in AI.

NVIDIA

NVIDIA’s upcoming earnings report will largely depend on the demand for its Blackwell chips, rather than its business in China. Similar to Broadcom, the expansive growth in AI will influence demand for NVIDIA stocks.

Palo Alto Networks

Recent worries about the company’s acquisition decisions and general market weakness in cybersecurity have impacted its stock. Jim believes these concerns are somewhat inflated, expressing a sense of optimism about Palo Alto’s situation.

Starbucks

Starbucks stands out as a favorite consumer stock in our portfolio. Led by CEO Brian Nicole, the changes needed for turnaround will need patience, as timing is crucial for the best buying opportunities.

TJX Companies

There’s been little movement with TJX ahead of next week’s earnings report. After a two-month dip, shares have settled near $130, so keeping with it seems like the right call despite some technical concerns.

Texas Roadhouse

Now’s a good time to buy into Texas Roadhouse. While beef prices have impacted profitability, the chain is performing well. It’s uncertain when the stock will rebound after last week’s revenue-related sell-off.

Wells Fargo

This bank stock seems undervalued, and Jim would encourage buying it if it isn’t already part of your portfolio. He believes it has the potential to exceed record highs. Plus, now that the asset cap has been lifted, Wells Fargo may be well-positioned for more M&A activity.