Jim Cramer's 14 Favorite Stocks

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Includes: AA, AAPL, BIDU, BTUUQ, CAT, COH, CRM, GLD, HD, PIR, PM, SBUX, SCCO, WYNN
by: Insider Monkey

Jim Cramer is the host of CNBC's Mad Money and the chairman of TheStreet.com. Nearly 250,000 people watch his show daily on TV and most of these are ordinary investors trying to understand what’s going on in the market. Cramer’s bullish and bearish stock picks on his show is the starting point for many investments made by these folks.

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

Company

No. Of Times Picked

First Date*

Return (%)**

Excess Return (%) (wrt S&P500)

Apple (NASDAQ:AAPL)

4

9/10/10

43.3%

34.8%

Starbucks (NASDAQ:SBUX)

4

11/15/10

23.1%

25.3%

SPDR Gold Shares (NYSEARCA:GLD)

3

9/22/10

43.2%

37.7%

Alcoa (NYSE:AA)

2

10/11/10

-9.7%

-10.7%

Baidu.com (NASDAQ:BIDU)

2

9/10/10

70.3%

60.2%

Peabody Energy (BTU)

2

9/10/10

2.4%

-3.7%

Caterpillar (NYSE:CAT)

2

9/13/10

18.4%

12.6%

Coach (NYSE:COH)

2

11/5/10

2.7%

6.9%

Salesforce.com (NYSE:CRM)

2

9/17/10

5.6%

0.7%

Home Depot (NYSE:HD)

2

5/13/11

-12.6%

0.3%

Pier 1 Imports (NYSE:PIR)

2

9/6/11

-2.6%

-1.9%

Philip Morris International (NYSE:PM)

2

6/27/11

0.0%

10.1%

Southern Copper (NYSE:SCCO)

2

8/16/11

3.7%

6.7%

Wynn Resorts (NASDAQ:WYNN)

2

9/13/10

64.4%

56.3%

Average

18.0%

16.8%

Click to enlarge

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

** Includes the duration from first date till September 10.

Cramer's favorite stock recommendations returned 18% on average since they have been recommended. The average relative performance of these stocks against the S&P 500 (NYSEARCA:SPY) is 16.8%. 11 of his favorite 14 stocks have managed to beat the market.

Cramer's most favorite stocks during the last 30 days were Apple and Starbucks. He repeated his buy recommendation of these stocks four times during that time.

Cramer praised Apple as being an innovation machine and the best-run company in America. As a leader of the mobile-internet revolution, Cramer said listening to conference calls (to find out that Apple is short in the memory space, for instance) is a way to find other companies in the sector poised to benefit from Apple.

Cramer’s charitable trust owns AAPL. To many investors’ solace, the stock hasn’t fallen as much as initially expected upon the news of Steve Jobs’ resignation. Apple is cheap relative to earnings, having a $357 billion market cap and only trading at 15 times earnings. Bill Miller of Legg Mason Capital Management has 2.3% of his portfolio in Apple (find more of Miller’s holdings here).

Strongly performed in Q2, Starbucks was in the portfolios of 31 hedge funds and has returned 19% year to date. Glenn Russell Dubin’s Highbridge Capital Management held more shares than others. By the end of June, the firm had increased the position by 23% and possessed 3.25 million shares.

Cramer repeated his buy recommendation of GLD three times during the last 30 days. Cramer repeatedly recommends having gold represent 20% of any given portfolio to serve as insurance against a volatile stock market. He said the safest and most efficient way to own the precious metal is through this ETF, which does an excellent job of tracking the price of gold. Cramer said to buy the ETF in weakness, during a time when the markets are going well, to get the best possible price. SPDR Gold Trust is the largest holding of Paulson’s 13F portfolio. As of June, he has $4.5 billion invested in GLD. It constitutes 15.82% of Paulson’s 13F portfolio. Paulson also has the highest stake in GLD. Soros has a minor $6.2 million invested in GLD which he has been reducing during the past few months (see George Soros’ top holdings here).

Cramer's other favorite stock during last 30 days was Alcoa. This aluminum producer received buy recommendations from Cramer, as he said the cash flow is bountiful, CEO Klaus Klienfeld is the real deal and that “Alcoa is back and will be bigger than ever." John Paulson of Paulson & Co. increased his AA position by 59% in the first quarter and held the position constant in the second quarter (more of Paulson’s stocks can be found here).

Cramer also repeated his buy recommendation of CAT two times during the last 30 days. This Cramer-favorite has experienced trouble in China since the country’s inflation fears became widespread. The heavy-equipment maker has a $54 billion market cap and the stock yields 2.2%. Jim Cramer has CAT in his charitable trust’s portfolio. Louis Navellier of Navellier & Associates also owns over 400,000 shares (see more of Navellier’s stocks here).

Disclosure: I am long PM and physical gold.