We recently compiled a list of the Jim Cramer’s Latest Lightning Round: 11 Stocks to Watch.In this article, we are going to take a look at where Joby Aviation, Inc. (NYSE:JOBY) stands against the other stocks in Jim Cramer’s watchlist.
Jim Cramer, the host of Mad Money, urged investors to refrain from making any investments in high-value stocks, particularly in the Big Tech sector, ahead of upcoming earnings reports, which will attract considerable scrutiny. Cramer expressed concern over significant price movements in various stocks leading into earnings, stating, “you can’t make up these moves.”
He emphasized that these surges create heightened risks for those looking to purchase stocks before a company’s earnings announcement. He pointed out that there is underlying volatility affecting nearly every major company. He noted that the stocks that he mentioned on Friday were trading erratically high on October 28. You can read which stocks Cramer discussed on Friday in our article, Jim Cramer’s Latest Game Plan: 20 Stocks to Watch.
He went on to highlight that:
“First you need to understand that no one knows these earnings numbers ahead of time except the CEO, the CFO, and a very small group of very important people at each company, and they are tight-lipped.”
Cramer criticized analysts for their attempts to predict earnings, stating, “We’ve seen how wrong they can be over and over again.” According to Cramer, when a stock spikes before earnings, it does not indicate insider knowledge but rather excessive enthusiasm. He further cautioned that these price increases are occurring without any solid basis, making it perilous for investors. He said, “In other words, these stocks are going up on nothing and that I think makes it very dangerous.”
Cramer reiterated his advice and said:
“I am indeed trying to discourage you from trading these stocks ahead of the quarters. It’s just a roulette game based on nothing. Often the game feels rigged, you just don’t know which way it’s rigged because companies really and truly do not let this stuff drip out.”
Concluding his remarks, he said:
“Bottom line, no one on Wall Street knows what any of the quarters will look like, except for the principals. So don’t bother to follow the money that you see trading right now in anticipation. You know why? It’s a fool’s errand.”
Our Methodology
For this article, we compiled a list of 11 stocks that were discussed by Jim Cramer during the lightning round of his episodes of Mad Money on October 25 and 28. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 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).
A futuristic electric vertical takeoff and landing aircraft soaring through the sky.
Number of Hedge Fund Holders: 15
Here’s what Cramer had to say about Joby Aviation, Inc. (NYSE:JOBY):
“Well, they just raised capital and that capital is gonna let them, you know, they’ve got enough money to be able to last for some time… I think they’re okay for now because of the 40 million shares that they sold at $5.05, and that’s not that far from here, but if it gets to $7, I would take the money and kaching kaching.”
Joby Aviation (NYSE:JOBY) is a vertically integrated air mobility company focused on developing electric vertical takeoff and landing (eVTOL) aircraft designed for air transportation as a service. Recently, the company announced the pricing of its underwritten public offering, which consists of 40,000,000 shares of common stock priced at $5.05 per share. This offering is projected to generate gross proceeds of approximately $202 million, excluding underwriting discounts and related expenses.
While the industry presents inherent risks due to its emerging nature, the company has positioned itself as a significant player through its technological advancements. Currently, the company has constructed three production prototype aircraft, and its certification plans are moving forward. Recently, the Federal Aviation Administration (FAA) has released operational rules and pilot training requirements for powered-lift aircraft, like those developed by Joby.
Joby Aviation (NYSE:JOBY) also achieved a significant milestone by receiving certification from the United Arab Emirates, making it the first electric air taxi to gain official recognition worldwide. In a recent announcement, Toyota committed $500 million to support Joby’s certification and commercial production efforts.
Overall JOBY ranks 8th on Jim Cramer’s stock watchlist. While we acknowledge the potential of JOBY 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 JOBY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
