Jim Cramer is the host of CNBC's Mad Money and the founder of TheStreet.com. In 1987, Cramer started his own hedge fund and returned an average of 24% per year between 1987 and 2001. Cramer has also written six money management books.
Ken Heebner, of Capital Growth Management, was one of the most popular fund managers with tremendous returns until the 2008-2009 crash. He managed to beat the S&P 500 index by 63 percentage points in 2001. Here are 14 stocks Cramer and Heebner both love:
Baidu (NASDAQ:BIDU): China’s version of Google (NASDAQ:GOOG) is the only Chinese stock Cramer will recommend because the government essentially blessed the company by forcing Google out of the picture (by forcing its to comply with local laws or leave). The stock has a $37 billion market cap and trades at 48 times earnings. Heebner had $222 million in BIDU at the end of June.
Priceline.com (PCLN): One of the best performing stocks of the past 5 years, this travel deals company has seen its stock price rise 1,400%. Priceline has a $22.7 billion market cap and trades at 32 times earnings. Ken Heebner had $214 million in PCLN at the end of June. George Soros of Soros Fund Management has all but emptied his position in the stock (see more of Soros’ picks here).
Cummins (NYSE:CMI): This engine maker does a lot of business in China, but the stock has been hammered since China has been aggressively raising rates. Cummins has a $15.6 billion market cap and the stock is trading $1 above its 52-week low of $79 per share. Cramer’s charitable trust owns the best-of-breed engine maker. Ken Heebner had $180 million in CMI at the end of second quarter.
Herbalife (NYSE:HLF): This direct-sales company delivered a great quarter in which it earned 88 cents a share, beating estimates by 5 cents per share. Cramer touts the company’s international exposure, as only 20% of sales come from North America. Ken Heebner had $174 million in the stock at the end of June.
Halliburton (NYSE:HAL): Cramer recommends buying this second-largest oil service and equipment company. Its engineering capabilities actually make it a tech play (in the oil industry) that has helped create a 75% increase in production. Heebner had $168 million in the stock at the end of June. T. Boone Pickens of BP Capital reduced his position in the stock by 3%, but it still represents 4% of his portfolio.
Freeport-McMoRan (NYSE:FCX): This accidental high-yielder is still a favorite of Cramer’s. While the stock’s chart is bad and analysts are down on copper all of a sudden, Cramer thinks the stock should be bought with discipline on the way down. Cramer’s charitable trust owns FCX. Freeport-McMoran has a $29 billion market cap and yields 3.3%. Heebner had $104 million in the mining company. Ken Fisher of Fisher Asset Management reduced his position by 41% (see more of Ken Fisher’s stocks here).
Wynn Resorts (NASDAQ:WYNN): “In Steve Wynn I trust,” exclaimed Cramer, who thinks Wynn Resorts is poised to go higher. Cramer said casinos are similar to restaurants in that when the price of gas goes down, the more discretionary income a consumer has to spend elsewhere.
Chevron (NYSE:CVX): Cramer’s charitable trust owns Chevron, and Cramer continues to boast about the stock’s growth prospects and 3.4% yield. This oil company has a $181 billion market cap.
Walter Energy (NYSE:WLT): This stock has been making headlines, but Cramer said its rise is due to potential takeover and not the news out of China. The energy company has a $3.7 billion market cap and trades at 8 times earnings.
Whiting Petroleum (NYSE:WLL): Whiting Petroleum engages in the acquisition, production, transportation and refining of oil and gas. They also have a significant position in the famed Bakken Shale. The stock has fallen more than 40% since missing its quarter, although it only missed earnings by a penny. Cramer thinks the decline in oil may have contributed to the stock’s decline. However, with a net asset value of $70, double the current stock price, Cramer thinks Whiting is worth considering. Whiting has a $3.7 billion market cap and trades at 12.6 times earnings.
Union Pacific (NYSE:UNP): Transportation stocks are an accurate gauge on the rate of the economy, and Cramer recommends owning transport stocks that maintain pricing power. Union Pacific is a company that fits the bill, but Cramer reiterated that a stock should never be bought when it’s up more than 4 points.
Prudential Financial (NYSE:PRU): While not keen on owning financials, Cramer’s charitable trust owns Prudential and is the only insurance play Cramer said he would make, citing the company’s limited to exposure to day-to-day financial worries. Prudential trades at 7.7 times earnings, has a $22.6 billion market cap and provides a 2.5% yield.
Equity Residential (NYSE:EQR): Cramer expressed that he likes these REITS, but he prefers buying ones with bigger yields. Since EQR only yields 2.6%, Cramer is willing to buy Health Care REIT (HCN), which yields 6.1%.
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 (NYSE: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.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.