Jim Cramer's 11 Favorite Stocks

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Includes: AAPL, CAT, CMI, COST, CRM, DE, F, KMP, NAT, NTAP, PVH, SPY
by: Insider Monkey

Jim Cramer is the host of CNBC's Mad Money and the chairman of TheStreet.com. In 1987 Cramer started his own hedge fund and returned an average of 24% per year between 1987 and 2001. Cramer also authored six money management books.

During the last 30 days his favorite buy recommendations (based on number of mentioned days) on Mad Money were as follows:

Company

No. Of Times Picked

First Date*

Return (%) **

Excess Return (%) (wrt S&P500)

Apple (NASDAQ:AAPL)

4

6/15/2010

25.2%

8.6%

Caterpillar (NYSE:CAT)

4

8/12/2010

43.5%

21.2%

Cummins (NYSE:CMI)

3

7/27/2010

18.3%

2.6%

Costco (NASDAQ:COST)

3

8/26/2010

41.4%

15.7%

Salesforce.com (NYSE:CRM)

3

6/15/2010

47.0%

27.5%

Deere & Company (NYSE:DE)

3

7/20/2010

32.2%

11.5%

Ford Motor (NYSE:F)

3

6/15/2010

9.7%

-4.9%

Kinder Morgan Energy (NYSE:KMP)

3

6/17/2010

14.7%

-0.4%

Nordic American Tanker (NYSE:NAT)

3

5/18/2011

-7.0%

-1.4%

Network Appliance (NASDAQ:NTAP)

3

5/20/2011

-7.5%

-2.5%

Phillips-Van Heusen (NYSE:PVH)

3

9/7/2010

22.4%

4.4%

Average

21.80%

7.50%

* Represents latest recommendation change from sell to buy. The study interval includes only past one year.

** Includes the duration from first date till June 16.

Cramer's favorite stock recommendations returned 21.8% on average since they have been recommended. The average relative performance of these stocks against the S&P500 is 7.5%. Seven of his favorite 11 stocks have managed to beat the market.

Cramer's most favorite stocks during last 30 days were Caterpillar and Apple. He repeated his buy recommendation of these stocks four times during the last 30 days. Caterpillar is a Fortune 100 company and the world's leading manufacturer of construction and mining equipments. CAT has gained 43.5% since August 12, 2010, beating the SPY by 21.2 percentage points. The stock has a market cap of $61.7 billion, P/E ratio of 17 and dividend yield of 1.9%. Caterpillar also has a conservative payout ratio of around 31 percent. Ken Fisher's Fisher Asset Management had $820 Million in Caterpillar at the end of March. On 25 May, Cramer said “I think the industrials are coming back into vogue. That's Caterpillar. I think the staples probably are too played out." On June 1st he added “Now here's the issue. Is silver equal to gold? They will trade together, so I think we've got to sell the Silver Wheaton, and we can bring in an industrial ... maybe a Caterpillar as it comes off, under $100." Recently CAT traded at 95.63. This is cheaper than Cramer's recommendation price.

Apple has a market cap of $296 billion and forward P/E ratio of 11.16. Apple recently traded at $320.8 and has gained 25.2% since June 15, 2010, beating the SPY by 8.6 percentage points. Apple is one of Fortune's top 10 picks for 2011. Phill Gross and Robert Atchison's Adage Capital had $503 Million in Apple at the end of March. Ken Griffin's Citadel Investment Group, David E. Shaw's D. E. Shaw group and Rob Citrone's Discovery Capital have large AAPL positions in their portfolios. Hedge funds had $7.3 billion in AAPL. On the other hand George Soros is getting a little bit cautious about AAPL. He reduced his Apple holdings by 93K shares at the end of March (See George Soros' top stock picks here).

Cummins Inc. provides diesel and natural gas engines, power generation equipments and custom power supplies worldwide. Cramer repeated his buy recommendation of CMI three times during the last 30 days. On June 1st, he said "The news was electric. People bought stocks that they had been selling yesterday. Notably all the stocks that do better in an economic expansions... companies like Cummins, Caterpillar, Deere. At the same time, they sold all the same things they bought yesterday, all the consumer staple stocks." CMI has gained 18.3% since Jul 27, 2010, beating the SPY by 2.6 percentage points. The stock has a market cap of $18.3 billion, P/E ratio of 15 and dividend yield of 1.1%. Cummins is one of the 30 stocks that are expected to beat the S&P 500 by three percentage points. Ken Fisher's Fisher Asset Management, Ken Griffin's Citadel Investment Group and Jim Simons' Renaissance Technologies had the largest positions in this stock at the end of March. (See Jim Simons' top stock picks here)

Ford Motor has gained 9.7% since June 15, 2010, underperforming the SPY by 4.9 percentage points. Philippe Jabre's Jabre Capital Partners had $240 Million in Ford Motor at the end of March. Ford Motor is one of the 40 stocks analysts are insanely bullish about. On June 11th Cramer said "I actually like Ford. I know, Ford is so out of fashion, it's scary, but I'm a believer"

Kinder Morgan Energy Partners has gained 14.7% since June 17, 2010, underperforming the SPY by 0.4 percentage points. The stock has a market cap of $22.5 billion, dividend yield of 6.4% and P/E ratio of 43. On April 6th, Cramer said that "Keep in mind, Kinder Morgan Energy Partners ... back to $71. We want yield. Yield is what protects us in vicious, bad markets." KMP recently traded at 70.61. Michael Messner's Seminole Capital had $22 Million in KMP at the end of March.

We like Cramer's track record of beating the index funds on the average and we believe investors can beat the market by imitating Cramer's favorite stock picks.

Disclosure: I am long SPY.