Jim Cramer's Latest Stock Picks

by: Insider Monkey

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 30th show, Cramer discussed the following stocks.

YUM! Brands (NYSE:YUM): With increasing news on China’s economic slowdown, Cramer is looking forward to YUM! Brands’ (owner/operator of KFC, Taco Bell and Pizza Hut) earnings report on Tuesday, Oct. 4th. YUM! Brands yields 2.3%, trades at 19 times earnings and has a $22.94 billion market cap. Bill Miller of Legg Mason Capital Management reduced his position by 19% (see more of Miller’s stocks).

Costco (NASDAQ:COST): This long-time Cramer-favorite is increasingly taking share away from supermarkets. This bulk-retailer is the best-in-breed and reports earnings on Wednesday, Oct. 5th. Costco trades at 26 times earnings and yields 1.15%.

Monsanto (NYSE:MON): Cramer thinks this genetically-modified seed company is going to be hit from broader sector news regarding the bumper (surplus) crop, which will bring earnings down. Monsanto has a $32.11 billion market cap and yields 2%.

Marriott (NYSE:MAR): Serving as a barometer for the travel industry as a whole, Cramer thinks Marriott’s upcoming quarterly report will give insight into what can be expected from other travel stocks like Priceline.com (NASDAQ:PCLN). Marriott has a $9.6 billion market cap and trades at 21 times earnings.

Constellation Brands (NYSE:STZ): Cramer said the liquor market has been weak and recommended to sell Constellation Brands if you own it. Diageo (NYSE:DEO) is a much stronger company with surging brands and offers a 4% yield. Diageo has a $52.28 billion market cap and is relatively cheap, trading at 15.5 times earnings.

Ford (NYSE:F) and General Motors (NYSE:GM) are reporting next week and Cramer said we need to hear that they’re on track to sell 12.5 million cars. Either way, Cramer thinks investors should hold off on auto stocks because of their large exposure to Europe.

TECO Energy (NYSE:TE): A viewer asked Cramer for his opinion on this energy stock, which Cramer loved because it fits right into his group of high-yielding utilities with solid fundamentals. TECO yields 5% and trades at 15.5 times earnings.

While many money managers have been telling Cramer that China is fine and not of concern, Cramer said the companies are telling him otherwise.

Earth-moving equipment maker Joy Global (JOYG) said they haven’t seen a reduction in equipment orders, but materials stocks like Arch Coal (ACI) have a better read on demand, and the pricing says demand is weak. Steel-maker Alcoa (NYSE:AA) is struggling to hold its own levels, which Cramer directly correlates to China’s lack of demand for the metal.

Casino and gaming company Wynn Resorts (NASDAQ:WYNN), which is a direct-China play because of its Macau business, has been down heavily on the prospect for slow growth in China. High-end brands that depend on discretionary consumer spending like Tiffany (NYSE:TIF) and Coach (NYSE:COH) have been down on growth concerns and rising inflation in China.

Sina Corp (NASDAQ:SINA): Cramer urged a viewer to sell the stock because the market is having enough problems out of China without having to deal with accounting irregularities. This Chinese internet stock has a $4.42 billion market cap.

Itau Unibanco (NYSE:ITUB): Although the Latin American bank offers a 3% yield and has large market exposure, Cramer thinks no banks should be owned in this environment; regardless of the country. Itau Unibanco has a $70.4 billion market cap and trades at 22 times earnings.

Cramer reiterated his love for solid utility companies with safe earnings and strong yields, such as American Electric Power (NYSE:AEP), Southern Company (NYSE:SO), ConEd (NYSE:ED) and Duke Energy (NYSE:DUK). All of which yield over 4.4% and trades under 18 times earnings.

Freeport-McMoRan (NYSE:FCX): Cramer continued to recommend Freeport-McMoRan for its large physical assets and strong dividend. Cramer said it feels like the stock is going to become an accidental high-yielder at 5%. Cramer’s charitable trust owns FCX. Freeport-McMoRan trades at 8.5 times earnings.

Cramer advised investors to take some profits from the high-multiple stocks – Chipotle Mexican Grill (NYSE:CMG), Salesforce.com (NYSE:CRM), Priceline.com (PCLN), Amazon (NASDAQ:AMZN) and Deckers Outfoors (NASDAQ:DECK) that he has been recommending. Cramer fears they may soon suffer similar erosion of Netflix (NASDAQ:NFLX) caused by unease and volatility in the market.

Deere (NYSE:DE): Cramer said Deere is going through a bit of a rough patch because the stock trades with the price of commodities, which have been down across the board. However, Cramer said that is great news for General Mills (NYSE:GIS), who uses an abundance of grain commodities to make products. Jim Chanos of Kynikos has 2.4% of his 13F portfolio in Deere (see more of Chanos’ picks here).

Walgreens (WAG): The retailer has been involved in an ongoing fight with Express Scripts (NASDAQ:ESRX) regarding pharmacy-benefit management. Cramer, however, thinks Walgreens is a terrific company and that it should be bought. Walgreens has a $29.78 billion market cap, trades at 11.2 times earnings and yields 2.7%.

Research in Motion (RIMM): Cramer said the Blackberry-maker is a wasting asset and gave it a sell recommendation. He sees the stock going even lower. RIMM has a $10.64 billion market cap and trades at 3.7 times earnings.

Veolia Environ (NYSE:VE): Cramer advised going forward with caution, as he’s not sure if the abnormally high-yield is sustainable. Veolia trades at 9 times earnings and yields 12%.

Cablevision (NYSE:CVC): Cramer gave Cablevision a buy, despite having no catalyst for growth. The stock yields close to 4% and trades at 11 times earnings.

Pepsi (NYSE:PEP): Cramer gave Pepsi a buy recommendation, stating that both the yield and long-term growth were ideal. PepsiCo has a $98 billion market cap, trades at 16 times earnings and yields 3.3%. Ken Fisher of Fisher Asset Management increased his position by 5% (see Fisher’s portfolio here).

Illumina (NASDAQ:ILMN): Cramer said it is too early to come in on this gene-sequencing machine maker, citing growing concerns of the lack of government spending on healthcare related costs in weak economic environments. Illumina has a $5.1 billion market cap and trades at 46.5 times earnings.

Opko Health (NYSEMKT:OPK): This medical-device maker also has a reach in vaccines and other medical services. Cramer said it could make for a good trade, but not a good stock to own as an investment. Opko has a $1.25 billion market cap.

Brasil Foods (NYSE:BRFS): One of the largest Latin-American food companies, Cramer said the long-term story is strong, but isn’t quick to recommend it because the stock offers no yield and there is no catalyst. Brasil Foods has a $15.26 billion market cap and trades at 16.5 times earnings.

Harry Winston (HWD): Cramer said he still sees the stock going lower and that it may be a good speculation play. Harry Winston has a $860.66 million market cap and trades at 31 times earnings.

Bristol-Myers (NYSE:BMY): Cramer once-again recommended this pharmaceutical company for its diverse product offering and strong yield. Bristol-Myers trades at 16.3 times earnings and yields 4.2%.

Red Hat (NYSE:RHT): Cramer said investors should wait for the stock to go lower before owning with call options. Apples-to-apples, Cramer would rather wait for Salesforce.com (CRM) to bottom and own it instead. Red Hat trades at 63 times earnings.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.