Jim Cramer is one of the top watched TV personalities on CNBC. He is the host of mad Money and also the co-founder and chairman of TheStreet.com. Nearly two hundred fifty thousand people watch his show daily on TV and most of these are ordinary investors trying to understand what’s going on in the market. Jim Cramer’s bullish and bearish stock picks on his show is the starting point for many investments made by these folks.
During the September 22nd show, Cramer discussed the following stocks.
Fortune Brands (FO): Cramer did not recommend buying Fortune Brands because there are better alcohol companies available with more growth and exposure. Fortune has a $8.5 billion market cap. Cramer’s recommendation is the exact opposite of what activist investor Bill Ackman is doing. Bill Ackman had more than $1 billion invested in FO at the end of June.
EMC Corp. (EMC): Cramer said EMC Corp was a great, low-risk way to play the tech bottom. The company’s pristine balance sheet and the seasonality of tech make this a good stock to own in this environment. EMC has an 80% stake in VMWare (VMW), a virtualization and software company that will account for 20% of EMC’s earnings. Cramer’s charitable trust owns EMC. EMC Corp trades at 21.4 times earnings and has a $42.35 billion market cap.
Other tech stocks Cramer recommended included Apple (AAPL) for its stability and continued growth, Avnet (AVT) because the price was almost cut in half, Juniper Networks (JNPR) for its diverse revenue stream and NVIDIA (NVDA) for its dominance in the chip space. Cramer is really bullish about tech stocks right now after avoiding them all summer long.
Hewlett Packard (HPQ): After replacing Leo Apotheker with Meg Whitman as CEO, Cramer said Hewlett Packard is OK to own below $20, but investors should wait for the stock to bottom. HP has a $45 billion market cap, trades at 5.4 times earnings and yields 2.1%.
Clorox (CLX): Cramer gave Clorox a buy recommendation because its portfolio of brands encompasses recession-proof products. The dividend was most recently boosted in May and CEO Donald Knauss has doubled the dividend over the last 5 years. Carl Icahn has 7.5% of his portfolio in Clorox and expressed willingness to buy the company at $78 per share (see more of Icahn’s stocks here).
Unilever (UN): Unilever received a buy recommendation from Cramer because it is a good company that is experiencing rapid expansion and it is cheap. Cramer‘s charitable trust owns Unilever. Cramer recommended selling Kraft (KFT) because the run-up was already over. Unilever has a $92 billion market cap and yields 4.2%.
Goldman Sachs (GS): Cramer advised a viewer to stay away from all financials, including the firm that gave him his start. Goldman has a $48 billion market cap and trades at 9 times earnings.
Stamps.com (STMP): Cramer likes Stamps.com and thinks they have a good business model. However, he still thinks the stock has room to fall. Stamps.com has a $300 million market cap and trades at 28 times earnings.
Cummins (CMI): Cramer’s charitable trust owns this engine-maker and Cramer is willing to take the pain in the short-term for expected results in 2012. Cummins trades at 11 times earnings and yields 1.9%.
Ford (F): Although rumors of a dividend have been circulating, Cramer advised against automotive stocks as the economy continues to decline. Ford has a $36 billion market cap and trades at 5.7 times earnings.
AT&T (T): Cramer sees AT&T as a win-win situation and the stock will go higher no matter what happens with the T-Mobile deal. Cramer’s charitable trust owns AT&T. With a 6.2% dividend, owning AT&T pays investors to wait for the economy to rebound. AT&T trades at 8 times earnings. George Soros of Soros Fund Management increased his position by 7% (see more of Soros’ portfolio here).
Aruba Networks (ARUN): Cramer gave Aruba Networks a buy recommendation, stating it was a good internet commerce company that had room to run with tech’s seasonal rebound. Aruba Networks has a $2 billion market cap and trades at 32.7 times earnings.
Teck Resources (TCK): Claiming that mineral companies are not “en vouge” right now, Cramer thinks Teck Resources stock is going to go even lower. Teck Resouces is trading pennies above its 52-week low of $30 and trades at 9 times earnings.
McMoRan Exploration (MMR): Cramer advised against this speculative oil play on the basis of there being other more stable oil companies with stronger earnings and growth as well as this being no time to take on more speculation. McMoRan has a $1.67 billion market cap.
Gold Resources (GORO): While bullish on gold, Cramer said the precious metal is going through a period of liquidation and suggests waiting a minute before making a play on gold. He said there is no use sitting in a stock and taking a beating. Gold Resources has a $1 billion market cap and yields 3%.
Clean Energy Fuels (CLNE): Cramer likes Clean Energy Fuels for a play on natural gas. CEO Andrew Littlefair said the private sector is moving forward to make natural gas a significant part of the United States’ energy future and is not waiting around for the government to pass the Natural Gas Act; although it would certainly boost investors confidence. Clean Energy has a $796 million market cap.
General Mills (GIS): General Mills closed up 2.8% and Cramer recommended buying it any day the stock was down. Cramer likes the big 3% dividend and said the company is positioned to benefit from a decline in raw costs. General Mills trades at 14.6 times earnings. Louis Navellier of Navellier and Associates reduced his position by 3% (see more of Navellier’s picks).
Joy Global (JOYG): Joy Global fell 9.4% because of the news of reduced coal demand in China. Cramer advised investors to only consider the stock when sellers are finished trading on headlines and returns to fundamentals. Joy Global has a $6.75 billion market cap and trades at 11 times earnings.
Disclosure: I am long T.