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.
David Tepper, after whom Carnegie Mellon‘s business school is named, is behind Appaloosa Management. Appaloosa manages $16 billion in assets and returned about 30% in 2010. Here are 10 stocks Jim Cramer and billionaire Tepper both love:
International Paper (IP): Although the paper industry is typically cyclical, Cramer gave International Paper a buy recommendation because of the 3.85% yield, its acquisition of Temple-Inland for $4.3 billion and consolidation in the industry as a whole, giving IP more control of pricing and larger profit margins. This paper company has a $12.07 billion market cap and trades at 9.5 times earnings.
Bank of America (BAC): Although the company repeatedly said they didn’t need new capital and that they had a large deposit base, Cramer feels Buffett’s investment may be enough to silence the noise surrounding Bank of America. This stock has a $77 billion market cap. Bruce Berkowitz of Fairholme increased his position by 8%. His fund had over 99.5 million shares of BAC at the end of June (see Berkowitz’s stock picks here).
Wells Fargo (WFC): A viewer inquired about Wells Fargo’s long-term growth prospects. While Cramer said WFC would be a survivor, in the end it is a bank stock and will be a long time before owning the stock will be profitable.
Apple (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. Cramer’s charitable trust owns Apple. Apple is also the most popular stock among hedge fund managers at the end of June (see the 10 most popular stocks). The stock outperformed the market by more than 25 percentage points since.
Google (GOOG): Cramer’s not concerned about the company’s recent anti-trust issues. They have positions in mobile, social and cloud services. The company is currently a part of the broader market sell-off. Cramer thinks the fundamentals are solid. Google has a $170 billion market cap and trades at 19 times earnings.
Cliffs Natural Resources (CLF): This international mining and national resources company received a buy recommendation from Cramer. Cliffs has a $10.3 billion market cap, yields 1.6% and trades at 6.4 times earnings.
Walter Energy (WLT): This stock has been making headlines recently, but Cramer said its rise is due to potential takeover. Unfortunately the stock got punished when it cut its output and sales for steelmaking coal. The energy company has about $5.5 billion market cap and trades at 12 times earnings.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.