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

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

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!