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 23rd show, Cramer discussed the following stocks.
Nike (NKE): The shoe and apparel maker reported the best earnings quarter this week and Cramer thinks investors should stick with the stock to take advantage of the company’s multi-year growth. Cramer’s charitable trust owns Nike. Nike has a $42 billion market cap, trades at 19 times earnings and yields 1.3%.
Walgreen’s (WAG): Cramer-favorite Walgreen’s intends to roll out more of the refined, polished stores similar to its NY-flagship and their prescription and general product sales have improved. Walgreens yields 2.6% and trades at 14 times earnings.
Jabil Circuit (JBL): Jabil is a company that assembles products for companies wishing to outsource production. Cramer likes that it is also an intellectual property play. Jabil Circuit reports earnings next week. Jabil has a $3.55 billion market cap and yields 1.7%.
Paychex (PAYX): Cramer thinks Paychex offers a more accurate look into unemployment figures, since they deal directly with payroll system management. He is looking forward to their earnings report next week. Paychex yields 4.7% and trades at 18 times earnings.
Darden (DRI): Darden has provided some serious disappointments as their raw costs are increasing, despite the 3.7% dividend. However, the price at the pump is going down, which Cramer said could benefit the company. Darden Restaurants has a $6.2 billion market cap and trades at 13 times earnings.
Family Dollar (FDO): Cramer loves dollar store companies in this economy and feels that Family Dollar Stores is a bargain. Family Dollar has a $6.57 billion market cap, trades at 17 times earnings and yields 1.3%. Activist investor Bill Ackman has the largest position in FDO at the end of June.
Micron Tech (MU): Cramer strongly recommended avoiding this struggling chip-maker’s stock, although people have been making speculative plays on the single-digit pricing. As one of the worst performers in the S&P last year, Cramer wondered why anyone would buy a losing stock versus other quality chip-makers that have recently been hammered. Micron has a $6.6 billion market cap and trades at 11 times earnings.
Dunkin’ Brands (DNKN): Dunkin’ Brands growth story is an international one and Cramer said the strong stock is virtually bulletproof, but still prefers Starbucks (SBUX) because it is cheaper and better.
CME Group (CME): Cramer thinks CME Group performs too much like a financial because they’re experiencing margin cuts and ever-increasing competition. The CME Group has a $17.25 billion market cap and yields 2.1%.
Waste Management (WM): Cramer is bullish about Waste Management because of their pricing power, which is provided by high barriers of entry in the business. Waste Management owns the largest network of landfills, which are cost-prohibitive and time-consuming to develop. The stock is an accidental high-yielder, currently yielding 4.4%. Executives said its dividend shows its commitment to returning cash to shareholders. Boykin Curry’s Eagle Capital has the largest position in WM among the 300+ hedge funds we are tracking.
General Mills (GIS): Cramer touts General Mills as one of the best companies that pays investors to wait for a turnaround. General Mills offers a 3.1% dividend and has been a more consistent performer than almost any other company, which justifies paying a little more for it. In the last quarter, gross margins have been squeezed by raw costs and rising commodities. However, those same commodities (milk, wheat, corn and soybeans) have all come down 3%, which puts the extra money right on the bottom line. General Mills trades at 14.6 times earnings. Louis Navellier of Navellier and Associates reduced his position by 3% (see more of Navellier’s stocks).
Telecom Argentina (TEO): With the market being so cruel to emerging markets, it may prove too difficult to call a bottom on this Argentinean stock. Instead, Cramer recommended Verizon (VZ), which also has a high yield that is safe.
Alerian (AMLP): Cramer loves Alerian and other master-limited partnerships (MLPs) and ETFs in this market for their high dividends which are stable based on their company structure. In order to avoid corporate taxes, their corporate structure demands they give the majority of earnings back to shareholders. Alerian yields 6.6%.
McDonald’s (MCD): International growth is huge for McDonald’s earnings and recently boosted the dividend. The stock now yields 2.8% and trades at 17.4 times earnings. Cramer thinks McDonald’s is a buy with room to run a few more points.
Cliffs Natural Resources (CLF): The market has seen a big decline in commodity stocks and Cramer advised letting them fall another 5-10% before buying. Cliffs Natural Resources has a 8.45 billion market cap and yields close to 2%. Ken Fisher of Fisher Asset Management owns over 1.25 million shares (see more of Fisher’s picks here).
Under Armor (UA): While Cramer’s charitable trust owns Under Armor rival Nike (NKE), he couldn’t help but recommend buying the stock because it has come down 10 straight points; not to mention declining costs and rising sales. Under Armor has a $3.75 billion market cap and trades at 47.5 times earnings.
Nordic American Tanker (NAT): Cramer quickly pointed out that he is not recommending any tanker stocks. Nordic American Tanker has a $741 million market cap and yields 7.8%.
Southern Copper (SCCO): Although copper prices are falling as worldwide demand is weakening, Cramer gave Southern Copper a buy recommendation because he believes the 9.45% dividend is safe. Southern Copper trades at 11 times earnings. Jim Simons of Renaissance Technologies increased his position by 44% (see more of Simons’ holdings).
Linn Energy (LINE): Cramer gave this energy company a buy recommendation in spite of oil and gas prices declining. Cramer said he’s not as big of a bear on oil as others have been lately. Linn Energy yields 7.5% and has a $6.45 billion market cap.
Universal Display (PANL): A viewer stumped Cramer with this stock, which rallied huge over the last 6 weeks. Universal Display is a maker of organic light emitting diodes (OLEDs), which are growing in popularity with electronics manufacturers. After such a run, Cramer admits that we missed it and doesn’t recommend chasing after it.
Deere (DE): Cramer thinks the agriculture market is strong, but advises viewers to wait until the stock is done falling before buying. Deere has a $28 billion market cap and yields 2.5%.
American Tower (AMT): American Tower has a strong 2012 ahead of it as wireless telecom providers need to build more towers to improve networks to keep up with increasing data demand. American Tower has a $20.7 billion market cap and trades at 54.5 times earnings.