Here are our top and bottom stocks over the past month. Not much green on the board
The stock market has been starving for good news this past month. One day after our last Monthly Meeting on Friday, February 27, the USA and Israel attacked Iran. In retaliation, Iran blocked the Strait of Hormuz oil transport waterway and struck targets in Israel and neighboring Arab countries, as well as US military installations in the Middle East. The conflict has caused oil prices to rise and stocks to fall due to fears of inflation and economic growth. Since then, rising crude oil prices have sent stocks tumbling; Brent international crude oil has increased by 50% and West Texas Intermediate crude oil has increased by 40% in the last 19 trading sessions. During the same period, the S&P 500 and Nasdaq were down more than 5% as of Thursday’s close. Both indices are on track to complete their fifth consecutive week of losses. Ahead of our upcoming Monthly Meeting (streamed live at noon ET on Friday), we normally look at our top and bottom performing stocks since our last meeting through the previous day’s close. In times of less volatility, current session transactions generally do not impact events. However, our list changed as Brent and WTI prices rose again on Friday and the stock market began to decline; hence we must include Friday’s action. CrowdStrike and Palo Alto Networks were the top gainers from Feb. 27 through Thursday’s close, with CrowdStrike and Palo Alto Networks gaining 5.5% and 5%, respectively. But news that Anthropic is testing its most powerful AI model yet sent a massacre of enterprise software stocks on Friday. CrowdStrike and Palo Alto Networks were not immune, as Jim Cramer repeatedly said they should be. Each fell more than 5 percent on Friday, putting them in negative territory since the start of the war. Concerns about AI disruption, particularly those stemming from Anthropic’s Claude, have dogged software stocks for months. But CrowdStrike and Palo Alto Networks were making some comebacks as the Iran war increased the risks of cyberattacks and the need for the best-of-breed protection these companies provide. While Cisco Systems Technology shares were among Friday’s biggest losers, Cisco Systems was no exception, but to a much lesser extent. It had gained 3.4% from Feb. 27 through Thursday’s close. On Friday morning, it was our only portfolio stock still in the green (up less than 1%) since the start of the war. Cisco has been one of the beneficiaries of an AI development boom that shows no signs of slowing down. The company’s network equipment is an integral part of what makes data centers run. On March 9, we sold some shares to preserve profits. At the time, the Club’s director of portfolio analysis, Jeff Marks, pointed out that double-digit order growth in the last quarter was a sign of great demand. The wild card for Cisco and many of its tech peers is the worldwide memory shortage; This increases costs and puts margins under pressure. Meta Platforms Our two biggest losses from February 27th through Thursday’s close shifted further into the red in Friday’s bearish market. Meta Platforms are at their worst since the beginning of the war (down more than 17%). The bulk of Meta’s losses occurred on the eve of the March meeting. Shares fell nearly 8% on Thursday after a Los Angeles jury found Facebook parent company and Alphabet’s Google negligent and failed to warn users about dangers associated with social media platforms. Meta is accused of paying 70% of the damages totaling $6 million. Jim warned investors against selling and said the crash could create a buying opportunity. Nike Nike currently ranks second worst (down 16.5% since the war began). Investors are worried about what will happen to consumer spending if the conflict drags on and the oil price shock slows the global economy by reigniting inflation. In this scenario, people will have less money to spend on Nike’s shoes and clothing. A series of bearish analyst calls didn’t help the stock either. Nike’s persistent underperformance has challenged our perspective on its stock and turnaround story under CEO Elliott Hill. “We’re not happy with the turnaround,” Jim said at Nike in early March. (See here for a complete list of stocks in Jim Cramer’s Charitable Trust.) When you subscribe to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trading alert before buying or selling a stock in his charitable foundation’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after issuing the trading alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH THE DISCLAIMERS. NO CIVIL OBLIGATIONS OR DUTIES EXIST OR SHALL BE RESULTING FROM YOUR RECEIVING ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULT OR PROFIT CAN BE GUARANTEED.
