We recently published Jim Cramer’s Exclusive List: 10 Stocks You Should Keep an Eye On. In this article, we shift our focus to where JetBlue Airways (NASDAQ:JBLU) stands relative to Jim Cramer’s other stocks.
Contents
Contrasting Perspectives on Market Movements
In a recent episode of Mad Money, Jim Cramer expressed exasperation with analysts who try to interpret stock movements without accepting the market’s unpredictable nature. He noted that while the Dow rose by 125 points, the S&P increased by 1.07%, and the NASDAQ jumped 2.17%, these gains stemmed from conflicting market perceptions. Only one viewpoint will prevail, with the cycle beginning anew each day.
> “Okay, look, it keeps happening, and it’s beginning to drive me even crazier than I already am. I’m talking about analysts attempting to explain why stocks do what they do in any given session without taking into account the capriciousness, if not the lunacy, of those who trade stocks for a living. Sure, the averages appear to tell a decent story. The Dow inching up 125 points, the S&P climbing 1.07%, and the NASDAQ vaulting 2.17%, but those percentages are the product of a furious battle between competing visions of reality. And only one vision can survive.”
The arguments of many analysts seem futile, as the market’s true behaviour often defies such logical explanations. Indeed, this unpredictability lies at the heart of financial trading.
Ineffectual Justification of Market Decline
Cramer went on to criticise the belief that the market’s decline was due to disappointment over the Consumer Price Index (CPI) report. He termed this justification “nonsense”. According to him, sellers had misread the situation and undervalued the potential impact of rate cuts.
> “I predicted that the average could actually finish up but it didn’t happen. I refused to dignify the musings of commentators who clung to the fiction that bulls were disappointed by the CPI reading. I knew the early action was just nonsense. Furthermore, I knew the sellers were wrong. What’s wrong with honestly stating the sellers are clueless and don’t understand the power of rate cuts?”
For Cramer, there is no harm in calling out irrational market behaviour and acknowledging that certain actions simply don’t make sense.
A Glance at JetBlue Airways Corporation (NASDAQ: JBLU)
JetBlue’s Performance Amidst Financial Struggles
Despite recent financial challenges, JetBlue Airways (NASDAQ:JBLU) shows promising investment potential. In Q2 2024, the airline reported a net income of $25 million. This figure, while lower than the previous year, exceeded earnings expectations. Revenue fell by 7% to $2.43 billion, but the earnings per share (EPS) of $0.08 surpassed analysts’ predictions.
The airline’s future looks positive, with expected reductions in operating costs due to lower fuel prices, which should improve profit margins. Though demand for air travel has softened, JetBlue’s broad network benefits from strong overall travel interest. The airline is projected to grow its revenue at an average annual rate of 5.4% over the next three years, slightly below the industry average but still positive.
Cramer’s View on JetBlue and Airline Stocks
> “Here’s my feeling on JetBlue Airways Corporation and on airlines. I haven’t bought an airline stock, other than for my father, since 1984, and it was an immediate mistake. I learned my lesson: don’t touch the airlines. There are a lot of better stocks out there; you don’t need to be in airlines.”
When asked about JetBlue, Jim Cramer shared his long-standing aversion to airline stocks. He hasn’t invested in this sector—aside from one purchase for his father—since 1984, and quickly realized it was a mistake. He advised against investing in airline stocks, suggesting more promising opportunities lie elsewhere.
The Bigger Picture: Hedge Fund Investments
This article discusses a recent Mad Money episode where Jim Cramer highlighted various stocks. We’ve examined hedge fund investments in ten selected companies and ranked them based on hedge fund ownership, from least to most owned.
A commercial jetliner at an airport gate with passengers waiting in the background.
Overall, JetBlue Airways Corporation (NASDAQ:JBLU) ranks 9th on Jim Cramer’s list of stocks to watch. While acknowledging JBLU’s potential, we believe some AI stocks promise higher returns within a shorter timeframe. If you’re looking for a more promising AI stock trading at less than 5 times its earnings, check out our report on the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
