Jim Cramer is the host of CNBC's Mad Money and co-founder 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.
No stranger to the world of investing, Bill Miller is one of the most closely followed fund managers. Bill Miller was also one of the top investors just 5 years ago. However, since then, his $3.8 billion Legg Mason Capital Management Value (MUTF:LMVTX) mutual fund lost close to 40%. These are the stocks Bill Miller and Cramer both love:
Annaly Capital Management (NYSE:NLY): This high-yielding REIT is one of Cramer’s favorites. The stock currently yields 14.5% and trades at 6 times earnings. Annaly Capital Management has a $17.26 billion market cap. Bill Miller owns over 3.5 million shares.
EMC Corp. (EMC): EMC Corp. operates in the Information Technology (NYSE:IT) sector, primarily by providing information infrastructure and data center operations. As more companies move into the cloud, Cramer said companies focused on providing data centers are the way to play it. EMC Corp. has a $46.65 billion market cap and trades at 23 times earnings. Bill Miller had $237 million in EMC at the end of June.
Apple (NASDAQ:AAPL): Cramer 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.
Despite news of Steve Jobs’ resignation, the tech giant’s stock didn’t get crushed the way many people thought it would. The product pipeline is set for the next couple of years, and Tim Cook has been around and leading the company for a while. Cramer thinks people should stick with Apple. Apple is also Bill Miller’s fourth-largest position.
Amazon (NASDAQ:AMZN): Bill Miller had nearly $200 million in AMZN at the end of June. Cramer said that Amazon is more than just a tech company; it is a retail stock -- the world’s largest, in fact. Cramer highly recommends the growth stock. 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 stocks).
IBM (NYSE:IBM): Cramer’s charitable trust, Action Alerts Plus, owns 400 shares of IBM stock. IBM offers integrated solutions to help businesses solve technological problems. The company has a $192.75 billion market cap, trades at 13 times earnings and yields 1.9%. Bill Miller had nearly $175 million in IBM but reduced his holdings during the second quarter.
Conoco Phillips (NYSE:COP): Cramer favors Conoco Phillips because it is the highest-yielding major oil company. The oil company has a $88 billion market cap, trades at 8 times earnings and yields 4.1%. He mentioned that the company could initiate a stock split. Again, at $63, Cramer said he would be willing to buy half the position at once. COP is one of Bill Miller’s and Warren Buffett’s favorite stocks. Warren Buffett has been adding to his holdings during the second quarter (see Warren Buffett’s top stock picks).
American Express (NYSE:AXP): Cramer’s charitable trust owns 2,700 shares of this charge and credit payment card company, and Buffett is its largest institutional shareholder. The company has a $58 billion market cap, trades at 12.6 times earnings and yields 1.5%.
AT&T (NYSE:T): Cramer likes AT&T for its strong yield protection in an uncertain market. George Soros increased his position in the stock by 7%. AT&T is trying to get around the Justice Department’s bid to block its merger with rival T-Mobile. This telecom giant has a $163 billion market cap, trades at 8 times earnings and yields 6.25%. Bill Miller had a small position in T at the end of June.
Verizon (NYSE:VZ): In light of recent labor problems, Cramer said that Verizon needs to remove the costs of operating landlines, as they are not making enough money to justify operations. This communications 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. George Soros of Soros Fund Management owns over 1.25 million shares (see more of Soros’ holdings).
United Parcel Service (NYSE:UPS): Cramer’s charitable trust owns UPS stock. It’s also a transportation stock that has pricing power (the ability to successfully change or raise prices when necessary) and subsequently offers a 3.3% yield. Miller owns over 75,000 shares.
Disclosure: I am long COP, T.