5 Stocks from Jim Cramer’s Charitable Trust

CNBC anchor and former hedge fund manager Jim Cramer has a large following because of his past success as an investor and for his media personality. Cramer’s charitable trust occasionally reports its stock positions, which includes a mix of value, growth, and income investments. We have gone through the most recent data on the trust’s holdings and here are five stocks it owns with trailing P/E multiples over 20 (implying that Cramer believes these stocks will achieve strong growth in order to justify the stock price):

Jim Cramer

Broadcom Corporation (NASDAQ:BRCM) trades a 27 times trailing earnings, but sell-side analysts believe that the $21 billion market cap communications technology company will do well over the next several years. Based on their consensus estimates, the forward P/E is 12 and the five-year PEG ratio is 0.9. As such, Broadcom is a classic growth stock: expensive on the basis of its current performance but potentially cheap when considering what its results will be in the future. Broadcom did grow its revenue 10% last quarter compared to a year earlier, though its earnings were actually down.  However, Cramer seems to be on board with the sell-side in expecting strong performance.

$6 billion market cap equipment manufacturer Lam Research Corporation (NASDAQ:LRCX) is another of the trust’s picks. Lam’s equipment is used to produce semiconductor devices. At a trailing P/E of 24, this is another stock that isn’t cheap on a historical basis and depends on future growth, and again Wall Street analysts see a strong growth trajectory: the forward P/E multiple is only 8. However, Lam has been struggling recently. It showed a decline in revenue in its most recent quarter versus the same period in 2011, and net income fell 86%. The stock price is down 14% over the last year, compared to the S&P’s 21% rise. As such, Lam is not just a growth play but an out-of-favor stock.

Cramer’s trust also owns shares of EMC Corporation (NYSE:EMC). We looked at EMC Corporation earlier this month. The data storage company is another pick that is expected to significantly grow its earnings per share over the next several quarters: it trades at 23 times trailing earnings but at 14 times forward earnings estimates. EMC, unlike the previous two companies we’ve discussed, is actually on the right track in terms of earnings growth. Earnings rose 19% in the second quarter compared to the second quarter of 2011, fueled by a 10% rise in revenue.

We compared The Home Depot, Inc. (NYSE:HD) and Lowe’s earlier this month (see our article on the hardware retailers) and Cramer’s trust recently came down on one side of this age-old debate by buying shares of Home Depot. At a $90 billion market cap, the company has a trailing P/E of 21 and a forward P/E of 18. Both of these seem a bit high, even when considering the 2% dividend yield, so in this case investors are more bullish than the sell-side. Last quarter earnings were up 12% compared to a year earlier, driven by a rise in margins. Home Depot’s stock is up 74% over the last 52 weeks.

NIKE, Inc. (NYSE:NKE) rounds out Cramer’s growth picks, with the trust’s holding carrying a trailing P/E multiple of 21. The stock trades at 17 times forward estimates, possibly on the strength of its global brand as a driver of growth potential. Nike grew its revenue by 12% in the fourth quarter of its May fiscal year versus last year’s fourth fiscal quarter, though earnings were down 8%. Billionaire Ken Fisher’s Fisher Asset Management increased its own position in Nike during the second quarter of 2012 to a total of 3.7 million shares.

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

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

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!