Beat the Market by Imitating Cramer's 21 Favorite Stocks

by: Insider Monkey

Jim Cramer is the host of CNBC's "Mad Money" show and the chairman of 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.

During the last 30 days his most favorite buy recommendations (based on number of mentioned days) on Mad Money are as follows.

Company No. Of Times Picked First Date* Return** Excess Return (wrt S&P500)
EOG Resources (NYSE:EOG) 7 25-Feb-11 0.8% 0.3%
Caterpillar (NYSE:CAT) 5 10-Aug-10 54.3% 34.6%
Peabody Energy (NYSE:BTU) 5 10-Sep-10 44.9% 24.2%
Baidu, Inc (NASDAQ:BIDU) 4 19-May-10 107.7% 86.8%
Continental Resources (NYSE:CLR) 4 11-Mar-11 7.0% 5.3%
Lululemon Athletica (NASDAQ:LULU) 4 13-Sep-10 108.0% 88.7%
Netflix (NASDAQ:NFLX) 4 14-Mar-11 13.4% 11.1%
Potash (POT) 4 16-Nov-10 27.4% 14.2%
Alcoa (NYSE:AA) 3 11-Oct-10 38.0% 23.3%
Apple (NASDAQ:AAPL) 3 14-Apr-10 34.6% 23.2%
AT&T (NYSE:T) 3 17-Mar-11 12.1% 7.7%
Chipotle Mexican Grill (NYSE:CMG) 3 19-Apr-10 117.5% 104.7%
Deere & Company (NYSE:DE) 3 12-Apr-10 55.8% 43.0%
Ford Motor (NYSE:F) 3 20-Jul-10 26.5% 2.5%
Freeport-McMoRan (NYSE:FCX) 3 20-Jul-10 73.6% 49.7%
Goldcorp (NYSE:GG) 3 18-Feb-11 18.7% 19.8%
OpenTable (NASDAQ:OPEN) 3 23-Dec-10 54.4% 48.5%
Sina Corp (NASDAQ:SINA) 3 24-Mar-11 15.0% 13.8%
Verizon (NYSE:VZ) 3 3-Aug-10 33.4% 13.6%
Weyerhaeuser (NYSE:WY) 3 4-May-10 30.0% 15.0%
Whiting Petroleum (NYSE:WLL) 3 16-Mar-11 11.7% 6.2%
Average 42.1% 30.3%

* Represents latest recommendation change from sell to buy.The study interval includes only past one year.

** Includes the duration from first buy recommendation till April 11, 2011.

Jim Cramer's favorite stock recommendations returned 42.1%, on average, since they have been recommended. The average relative performance of these stocks against the S&P500 is 30.3%. Almost all of his favorite stocks have managed to beat the market.

Jim Cramer's most favorite stock during last 30 days is EOG Resources. Jim Cramer first recommended this stock on February 25, 2011. He repeated his buy recommendation of EOG seven times during last 30 days. EOG has gained 0.8% since February 25, 2011, beating the SPY by 0.3 percentage points. EOG is one of the ten stocks T. Boone Pickens is extremely bullish about. Steve Cohen has a small position in EOG.

CMG has had one of the best performances in his recommendation list since April 19, 2010. CMG has gained 118% since then, beating the SPY by a large margin. Jim Simons' Medallion Fund had $133 million invested on in CMG shares at the end of 2010.

We believe investors can beat the market by imitating Jim Cramer's favorite stock picks. We will check Cramer's performance again at the end of April.

Disclosure: I am long T.