4 Stocks Favored By Cramer For Solid Growth In 2013: Mastercard Inc (MA), Visa Inc (V) and More

Despite catastrophic moments, most of the markets have shown sizeable gains in 2012. The NASDAQ has posted returns of 15% in the last year, while the S&P 500 was up by 13%. Moreover, 2013 had a fruitful start. The upwards trend is expected to continue for some more time.

It is essential to bet on the right stocks to take advantage of the optimistic environment. If you choose the right ones, you can harvest well from this year. Investors have a tendency to follow professionals and imitate their picks when choosing stocks to invest. As far as I see, Jim Cramer from CNBC is remarkably good at stock picking. I watch his Lightning Round and Mad Money shows very often, and appreciate his efforts to help “homegamers” make the most out of investing. I like following his suggestions and analyzing them in my point of view. He recently listed ten favorite stock picks he expects to outperform in 2013. In my article, I have picked the first four of his stock choices and added my own analysis on profitability and safety of these names. Here are the four stocks handpicked by Jim Cramer for solid growth in 2013.

Mastercard Inc (NYSE:MA)“These guys -
Amazon.com, Inc. (NASDAQ:AMZN) - are taking share and taking names, plus, the company keeps expanding its hardware ecosystem with new versions of the Kindle,” Cramer said, “also, they’re trying to own the digital content business the same way they own traditional online shopping, and it’s working.”

Amazon has been doing okay since mid-November 2012. The company did the right thing going after video content and making movies and tv shows available to Amazon Prime members, which brought a fruitful challenge with Netflix, Inc. (NASDAQ:NFLX) upon the company. Amazon is up by 20.5% since November 15.

The company is still performing well despite disappointing Q4 results. Analysts estimate a 17.2% upside potential in the mid-term. Revenue and assets leapfrog year by year. Debt-to assets ratio shows an ignorable debt amount. Out of twelve analysts, six gave a Buy call while the other six recommends holding AMZN shares. The stock has a Beta value of 0.88, second only to Liquidity Services in its industry.

AMZN data by YCharts

Amazon was a high-flyer once. There was a time when it was trading 100% above its fair value. The stock seems to be in a better mood as it is trading with a Relative Strength Index of 50.92%. Amazon has successfully managed to understand customers and adjusted to their demands. The e-book industry is growing larger day by day, which results in lower interest on physical books. Amazon is the key figure in the e-book industry now. With the e-book reader Kindle, Amazon has got a larger portion of the e-book reading customers.

“Our physical book sales experienced the lowest December growth rate in our 17 years as a book seller, up just 5%. We’re excited and very grateful to our customers for their response to Kindle and our ever expanding ecosystem and selection,” said Jeff Bezos, founder and CEO of the company.

Amazon investors have made considerable profits on their investment thanks to enormous growth in the stock. Although the stock relatively cooled off, it is still trading at unexplainable multiples. I can recommend it for short-term gains, but you have to wait for more reasonable levels if you prefer a long-term investment.

As you know, the tech giant Google Inc (NASDAQ:GOOG) stock hit a new all-time high, $776 per share, on rumors that the company might be close to dissolve the anti-trust investigations. Since the beginning of the year, shareholders enjoyed a 8.5% return.

GOOG data by YCharts

Despite rapid leapfrogs, Google still isn’t too hot to invest. Relative Strength Index (RSI) still offers some space for growth (RSI at 64.84% currently), and analysts agree on an average of 7.7% increase in mid-term. Revenue and assets are very optimistic, as well as cash flow. There are hardly any red flags in Google’s key stats. With a Beta value of 1.01, Google is the sixth least volatile stock in its industry.

As you can see, the balance sheet is quite strong. The company has just won a court case in Australia, fending off the claims that Google Ads were misleading. This decision of the Australia’s High Court will definitely lead to acceleration in Google’s upside movement for some time. Google is the dominant Internet search provider for a long time, and it has enlarged its arsenal to have permanent users that use Google beyond search, like Google+ and Gmail. What’s more, -like Cramer says- it “owns Android, the largest mobile operating system in the world”. I would not ignore this stock as it is likely to outperform this year.

The Mad Money host made the following remarks on Mastercard Inc (NYSE:MA) and Visa Inc (NYSE:V):

“These two stocks are both plays on the worldwide switch from paper currency to plastic, as they make their money from transaction volumes. Visa and Mastercard both reported strong quarters in October, and they have very healthy balance sheets.”

Both of the stocks are going straight up for years. These are no traditional banks, yet still offer financial exposure to shareholders. Both of them are renowned world-wide payment solutions and report sizeable growths most of the time. There’s really not much to compare one another, both of them are just “excellent” picks to bet on.

MA data by YCharts

Here is a small tip for you: Rush on them before “gift” days like Christmas and Valentine’s Day- yes, the one which is only a week away, so this is your one lucky moment. Credit card usage simply blows up to record numbers around these days, which leads to sharp rises, and eventually, larger volume values. Both of them hold very little debt, while their cash flows climb up year by year. If you buy some shares within this week, you will definitely be rewarded with nifty gains. The choice is yours to make. If you want consistent gains, choose Visa. If you wish to take more risks and go for a rougher challenge, choose MasterCard.

The article 4 Stocks Favored By Cramer For Solid Growth In 2013 originally appeared on Fool.com and is written by Cagdas Ozcan.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!