Jim Cramer was bullish at the beginning of August because he didn’t think the artificial crisis created by the “debt limit” increase didn’t really affect the stocks' bottom lines. Individual stocks have been performing spectacularly and beating earnings expectations on the average despite the high unemployment and subpar growth in the overall economy. However, Cramer quickly changed his tone as the crisis in Europe became serious. He urged his viewers to stay away from financials and tech companies in general and look for defensive stocks with strong fundamentals. During the month of August, Cramer recommended the following stocks on "Mad Money":
SPDR Gold Trust ETF (GLD): Cramer recommended this ETF six times in August. With the price of gold up 20.34% YTD, Cramer bolstered his stance on owning gold to insure the portfolio against drops in markets. Cramer stated the SPDR Gold Trust ETF is the safest, most convenient way to play the precious metal. John Paulson of Paulson & Co. has 13% of its portfolio in GLD (get more of Paulson’s holdings here). Gold is not done going up and the only time Cramer would recommend selling gold is when it represents more than 20% of your portfolio.
SodaStream (SODA): Cramer recommended SodaStream five times in August. Cramer felt the only way to play soda stream going into earnings is a deep in the money calls to protect yourself from potential downside. In the middle of the month SODA suffered a meltdown, particularly because of an awful guidance. Although the company‘s unit sales were up 226% from last year, Sodastream practically announced “we‘re done as a growth stock,” said Cramer. Cramer felt that the company’s comments against mega-retailer Costco (COST) hurt it as well.
Cramer advised taking some profits from this company back in July. It has become clear that Sodastrem will not be the new Keurig [from Green Mountain (GMCR)].”The difference is Keurig is transforming a market. Sodastream is attempting to create a completely new market,” Cramer said.
Apple (AAPL): Cramer recommended Apple four times during the month of August. While Cramer has been avoiding technology and bank stocks like the Plague, he used Apple as an example of how Fed Chairman Bernanke‘s decision to keep interest rates exceptionally low “at least through mid-2013“ made stocks the most attractive paper available. This company will generate huge earnings stream in the future for a relatively cheap price now, which can provide greater returns than 30-year treasuries.
Cramer praised Apple for being an innovation machine and the best-run company in America. As 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.
Caterpillar (CAT): Cramer gave a buy recommendation to Caterpillar twice, especially if the stock were to tick lower. United Rentals (URI) is a CAT distributor that has reported selling out of the equipment last month. Ken Fisher’s Fisher Asset Management has a particularly large holding of Caterpillar stock (check here for more hedge funds holding CAT stock). Cramer said CAT was one of the most “bedraggled” stocks to own in this market, he thinks it’s incredibly cheap. Caterpillar is trading at 14 times earnings and generating 6.05 earnings per share.
Home Depot (HD): Cramer recommended this stock twice in the past month, once on its own and once in comparison to Lowe‘s (LOW). The world‘s largest home improvement retailer reported a great earnings quarter in which net income rose 14% (primarily due to storm damage). Cramer recommends owning stock from this company that continues to deliver. Jason Capello of Merchants’ Gate Capital may feel differently, as he reduced his firm’s portfolio exposure to Home Depot by 29% (see more of Capello’s holdings here).
Amazon (AMZN): Cramer said that it is more than just a tech company and recommended owning it three times in August. It is a retail stock; the world’s largest in fact. Cramer highly recommends the growth stock. Chase Coleman of Tiger Global Management increased his firm’s position in the stock by over 40%.
This mega retailer has successfully forged forward in the mobile internet space with its Kindle e-Reader. The company has a $98 billion market cap and trades at 93 times earnings. Louis Navellier of Navellier and Associates reduced his position by 5% (see more of Navellier’s stock picks).
Conoco Phillips (COP): Cramer gave Conoco Phillips a buy recommendation three times in the past month. Cramer favors COP because it is the highest-yielding major oil company. Cramer continued to recommend the oil company because of its 4% yield, a pullback to the mid-60s and a potential split up in the near future.
Transocean (RIG): Cramer recommended Transocean twice in August. The world‘s largest offshore driller just bid $1.43B for Norway‘s Aker Drilling, a 98% premium. While this may seem unreasonable, Cramer poses the question: does anyone have more visibility than Transocean? Billionaire John Paulson has a huge position in RIG.
Kimberly Clark (KMB): This paper company received a buy recommendation twice in August. It has been a long-time favorite of Cramer’s, but he hasn’t been able to recommend it as of late due to the high raw material costs which were oil-related. Now that the price of oil has plummeted, however, Cramer thinks this is an opportunity to buy.
Cisco Systems (CSCO): On two different occasions, Cramer gave Cisco a buy recommendation. Cramer gave this stock a buy recommendation while remaining quite bearish on the tech industry as a whole. “Cisco is OK to own,” he said. “If it drops below $15, buy it. It’s no longer in the dog house.”
Chevron (CVX): During the month of August, Cramer recommended Chevron twice. Cramer just bought Chevron for his charitable trust because it has greater production growth than Conoco Phillips (COP). Bill Miller of Legg Mason Capital Management has 1.45% of his portfolio in Chevron.
Verizon (VZ): Cramer recommended Verizon twice in August. In light of recent labor problems, Cramer said that Verizon needs to remove the costs of operating landlines, as they are not making the money Verizon needs them to in order to justify operations. This telecommunications stock received a buy recommendation from Cramer because of its 5.8% yield as well as his belief that Verizon will come out on top with their labor issues.
Goldcorp (GG): Cramer said Goldcorp might be a buy twice during the month of August. Often hesitant to recommend miners over the direct-play SPDR Gold Trust ETF, as miners are subject to the fluctuations inherent in any business. For example, Goldcorp earnings potential was severely hampered by forest fires, flooding rivers and technical issues specific to the mining industry.
However, Cramer said this stock may be a “buy” since their short-term problems are behind them and he feels the stock can catch up to the bullion. Goldcorp is the lowest-cost producer in the industry.
EOG Resources (EOG): Cramer rated this stock as a buy twice in August. This domestic oil and gas producer reported a terrific quarter and beat estimates by $0.32. Cramer feels this is a growth stock that is poised to do well when oil prices bottom. T Boone Pickens of BP Capital has increased buying of EOG. Cramer stated that EOG Resources is the most underrated stock in the oil market. This market is giving EOG too little recognition for the company’s assets (considering BHP Billiton’s (BHP) willingness to purchase Petrohawk (HK) for 12.1B) and is providing a chance to own one of Cramer’s “absolute favorite stocks”.
Bristol-Myers (BMY): Cramer recommended buying Bristol-Myers because it is a takeover target whose fundamentals are solid. The pharmaceutical company also has some new drug discoveries and their skin cancer medicine is selling well. This pharmaceutical was recommended by Cramer twice in August.
Darden Restaurants (DRI): Cramer recommended Darden twice in August. Featuring a 3% yield, Darden’s CEO, Clarence Otis, Jr., said earnings are set to go higher because high gas prices (which he states acts like a tax on the consumer) are coming down.
Perrigo (PRGO): Cramer recommended this stock twice in the past month. Referred to by Cramer as the “best knock-off company known to man,” he believed they would report a good quarter. This “knock-off” producer opened down 8 points Tuesday when traders thought they were pouring cold water on future expectations, but rallied 9 points instantly. It was just a conservative move from one of Cramer’s favorite stock.
Deckers Outdoors (DECK): Cramer recommended this perennial twice in August. Deckers Outdoors continues to bounce back after every sell off. Cramer still recommends this stock, seeing growth potential and strong holiday sales.
Starbucks (SBUX): Cramer raved about this stock twice during the past month. This renowned coffee producer/retailer has not seen a decrease in sales lately and Cramer recommends buying this stock as the company’s gross margins could surge. Cramer recommends owning Starbucks because Howard Shultz pledged to keep out of politics and continues to hire.
Saks (SKS): Cramer recommended Saks twice in August. This high-end fashion retailer reported a better than expected quarter, although the stock has dropped 31% since March. Chairman and CEO Steve Sadove said the company is experiencing 15% top-line growth and the online business growth is up 50% since its inception. In 2010, Saks Direct (the online arm of Saks) saw revenue increase 28% year-over-year. The retailer is also seeing solid sales figures. In 2010, about 70% of sales were at full-price. Cramer doesn’t understand how the stock price is so low, and suggests that means it should be bought.
Wynn Resorts (WYNN): Cramer expressed his love of this gaming stock twice in August. “In Steve Wynn I trust,” exclaimed Cramer, who thinks Wynn Resorts is poised to go higher. Cramer said casinos are similar to restaurants in that when the price of gas goes down, the more discretionary income a consumer has to spend elsewhere.
Sanofi-Aventis (SNY): In August, Sanofi-Aventis was recommended twice by Cramer. Cramer recommended buying this high-yielding pharmaceutical because of its low valuation. The stock currently yields 3.8%. Ken Fisher of Fisher Asset Management owns over 13M shares.
Honeywell (HON): Cramer gave Honeywell a buy recommendation twice in August. The stock fell 3 points because of a downgrade to market perform from Sanford-Bernstein. Although Cramer thought it resulted more from macroeconomic concerns than the company itself. The stock finally hit Cramer’s recommended levels to buy.
HAIN Celestial Group (HAIN): The maker of natural and organic foods received a buy recommendation from Cramer twice in August and delivered a $0.02 cents earnings beat on a $0.33 cents basis. The company experienced 31% year-over-year growth, which is unheard of for a food stock. CEO Irwin Simon said 12%%-13% of that growth is organic. Despite this positive news, the stock is about 6 points off its high thanks to broader market weakness. Cramer thinks this presents a buying opportunity for this long-term growth stock.
Disclosure: I am long COP.