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.

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

The 10 Longest Wars of All Time

The 13 Worst Looking Foods that Taste Great

The 6 Most Gruesome Injuries Suffered During a Sports Match

The 20 Biggest Contracts in MLB History

The 7 Worst Blown Calls in Sports History

7 Free Ways to Advertise Your Business Online

The 18 Best R&B Songs of the 90’s

The 10 Most Dangerous States to be a Cop

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!