10 “Great” Earnings Reports Jim Cramer is Talking About

In this article, we will take a look at the 10 “great” earnings reports that Jim Cramer is talking about.

“The Fed is Either Done Tightening, or Almost Done Tightening”

On May 4, Jim Cramer of Mad Money shared his insights on the Federal Reserve’s latest rate hike and its implications for investors. Cramer discussed the Fed’s decision to raise rates by another 25 basis points. He pointed out that the Fed has now raised rates five times in just 14 months, making it the fastest series of rate increases in recent history.

Cramer expressed his support for staying heavy in cash in the current environment, as he thinks several challenges lie ahead for the market. However, he also highlighted that the Fed’s commitment to fighting inflation could bode well for stocks, particularly growth stocks, in the long term even if it drags them down in the short-term.

According to Cramer, the Fed’s approach to rate hikes will heavily depend on economic conditions. If the economy continues to heat up, the Fed may raise rates further. However, if it cools down, the Fed might take a more cautious stance. Cramer thinks that “the Fed is either done tightening or almost done tightening”, however, he does not anticipate rate cuts in 2023.

Cramer advised investors to consider investing in sectors that historically perform well during economic downturns. On the other hand, he also suggested buying housing stocks, citing that long-term interest rates have actually declined, which positively impacts mortgage rates. Additionally, Cramer also talked about investing in tech stocks since he thinks they will do well as the Fed stays committed to bringing inflation down to the target 2% rate. According to Jim Cramer, these counterintuitive approaches reflect the unique dynamics of the current market, where historical patterns may not hold true.

In a recent episode, Jim Cramer broke down multiple corporate earnings and split them in three categories: “great”, “okay”, and “more work to do”. Some companies that reported “great” earnings, according to Jim Cramer, include JPMorgan Chase & Co. (NYSE:JPM), UnitedHealth Group Inc. (NYSE:UNH), and Microsoft Corporation (NASDAQ:MSFT). Let’s now discuss these stocks, among others, in detail below.

Our Methodology

We watched the Mad Money episode that aired on May 2 and compiled a list of companies that reported “great” earnings, according to Jim Cramer. We then sourced each stock’s hedge fund sentiment from Insider Monkey’s database of roughly 900 money managers. We narrowed down our selection to stocks that were the most popular among elite hedge funds. These stocks are ranked in ascending order of the number of hedge funds that have stakes in them.

10. The Coca-Cola Company (NYSE:KO)

Number of Hedge Fund Holders: 58

On April 24, The Coca-Cola Company (NYSE:KO) posted earnings for the fiscal first quarter of 2023. The company reported an EPS of $0.68 and outperformed EPS estimates by $0.03. The company generated a revenue of $10.96 billion, up 4.35% year over year and ahead of Wall Street consensus by $175.16 million. As of May 12, the stock has gained 5.57% over the past 6 months.

Cramer said that The Coca-Cola Company (NYSE:KO) “crushed it, as always”. Jim Cramer noted that the company reported 12% organic growth, ahead of Wall Street estimates by 2%, and also said that The Coca-Cola Company (NYSE:KO) had “tremendous pricing power and solid share take”.

At the end of Q4 2022, 58 hedge funds were long The Coca-Cola Company (NYSE:KO) and disclosed stakes worth $28.8 billion in the company. Of those, Berkshire Hathaway was the leading investor in the company and disclosed a position worth $25.4 billion.

Rowan Street Capital made the following comment about The Coca-Cola Company (NYSE:KO) in its Q4 2022 investor letter:

“Let’s take The Coca-Cola Company (NYSE:KO) for example. Its dividend yield is 2.8%, earnings are estimated to grow at only 3.6% rate per year over next 4 years, and its earnings multiple is currently at 24x (based on next years forecasted earnings). KO has an anemic growth, so we can argue that paying 24x earnings is not very attractive. Let’s assume that the multiple will stay constant over the next 3-5 years, thus our expected annual returns will be 2.8%+3.6% = 6.4% (that is below the current reported inflation rate and only slightly above the risk-free rate of 4%).”

In addition to The Coca-Cola Company (NYSE:KO), other best-in-class stocks that delivered strong quarters include JPMorgan Chase & Co. (NYSE:JPM), UnitedHealth Group Inc. (NYSE:UNH), and Microsoft Corporation (NASDAQ:MSFT).

9. American Express Company (NYSE:AXP)

Number of Hedge Fund Holders: 71

Cramer likes American Express Company (NYSE:AXP) and thinks that the company had “a gigantic quarter with tremendous growth”. American Express Company (NYSE:AXP) reported earnings for the first quarter of fiscal 2023, on April 20. The company reported an EPS of $2.40 and generated a revenue of $14.28 billion, up 21.70% year over year and ahead of revenue consensus by $265.91 million.

71 hedge funds disclosed having stakes in American Express Company (NYSE:AXP) at the end of Q4 2022. The total value of these stakes amounted to $26.8 billion. As of December 31, Berkshire Hathaway is the largest shareholder in the company and has a stake worth $22.4 billion.

8. The Procter & Gamble Company (NYSE:PG)

Number of Hedge Fund Holders: 74

Cramer owns shares of The Procter & Gamble Company (NYSE:PG) through his charitable trust and said that the company has “showed that nice progression that we have been waiting for”. Cramer noted that The Procter & Gamble Company (NYSE:PG) reported a “line in the sand quarter” and said that he anticipates strong performance over the next few quarters as the company’s operating costs come down and it becomes “a lot more profitable”.

On April 21, The Procter & Gamble Company (NYSE:PG) announced strong earnings for the third quarter of fiscal 2023. The company grew its revenue by 3.54% and generated a revenue of $20.07 billion, outperforming Wall Street estimates by $747.3 million. The company reported earnings per share of $1.37 and beat expectations by $0.05. As of May 12, The Procter & Gamble Company (NYSE:PG) has returned 10.63% to investors over the past 6 months.

The Procter & Gamble Company (NYSE:PG) was held by 74 hedge funds at the end of Q4 2022. These funds held positions worth $4.71 billion in the company. As of December 31, Bridgewater Associates is the top shareholder and has a position worth $757 million.

Rowan Street Capital made the following comment about The Procter & Gamble Company (NYSE:PG) in its Q4 2022 investor letter:

“Let’s look at The Procter & Gamble Company (NYSE:PG). Dividend yield is 2.4%. Earnings are forecasted to grow at 5.9%, and its current earnings multiple is at 25x. Now, lets say over the next 3-5 years the market loses interest in the “safe”, mature companies that grow at anemic rates and gets an appetite for growth again. It’s very unlikely that Mr. Market will be paying 25x for 5.9% earnings growth. Lets assume that multiple declines to the market average of 18x — that would be ~6.9% drag per year on the total expected return over next 3-5 years. If we get 2.4% (dividend) + 5.9% (earnings growth) – 6.9% (decrease in earnings multiple) = 1.4% (annual return we can expect on average from this stock).”

7. Merck & Co., Inc. (NYSE:MRK)

Number of Hedge Fund Holders: 77

Merck & Co., Inc. (NYSE:MRK) “shot the lights out” and the company’s “revolutionary cancer drug” KEYTRUDA posted “incredible numbers”. Cramer likes the company’s cancer therapy, KEYTRUDA, and thinks it “may be one of the best-selling drugs of all time”. As of May 12, Merck & Co., Inc. (NYSE:MRK) has gone up by 16.73% over the past 6 months.

On April 27, Merck & Co., Inc. (NYSE:MRK) released earnings for the first first quarter of 2023. The company reported earnings per share of $1.40 and beat estimates by $0.06. The company’s revenue for the quarter amounted to $14.49 billion, ahead of revenue consensus by $687.74 million.

At the end of Q4 2022, 77 hedge funds were eager on Merck & Co., Inc. (NYSE:MRK) and held positions worth $5.16 billion in the company. Of those, AQR Capital Management was the leading investor in the company and held a position worth $344.8 million.

Aristotle Capital Management, LLC, made the following comment about Merck & Co., Inc. (NYSE:MRK) in its Q4 2022 investor letter:

“Founded in 1891 and headquartered in New Jersey, Merck & Co., Inc. (NYSE:MRK) is one the world’s largest pharmaceutical firms. The company’s drugs are used to treat conditions in a variety of areas, including oncology (~38% of revenue), vaccines (~19%), diabetes (~11%), animal health (~11%) and other (~21%). Merck produced over $48 billion in sales in 2021, just under half of which were generated in the United States. Within oncology, the firm’s immuno-oncology platform is becoming a major contributor to overall sales, driven by the blockbuster1 drug Keytruda. The company’s vaccine business is also significant and includes Gardasil for the prevention of HPV (the disease that can lead to cervical cancer in women), as well as vaccines for hepatitis B, pediatric diseases and shingles. In recent years, Merck has been shifting its focus toward unmet medical needs in specialty-care areas. As part of this shift in focus, in June 2021, Merck received $9 billion from the spinoff of its women’s health, established brands, and biosimilars businesses into the now independent, publicly traded company Organon…” (Click here to read the full text)

6. Exxon Mobil Corporation (NYSE:XOM) 

Number of Hedge Fund Holders: 79

Another “great” earnings report was of Exxon Mobil Corporation (NYSE:XOM). Jim Cramer said that the company had a “tremendous” quarter and delivered a “big beat-and-raise”. Shares of Exxon Mobil Corporation (NYSE:XOM) have gained 19.04% over the past 12 months, as of May 12.

On April 28 Exxon Mobil Corporation (NYSE:XOM) reported earnings for the fiscal first quarter of 2023. The company’s revenue for the quarter amounted to $86.56 billion and it reported an EPS of $2.83, outperforming EPS expectations by $0.24.

Exxon Mobil Corporation (NYSE:XOM) was spotted on 79 investors’ portfolios at the close of Q4 2022. These funds disclosed collective stakes worth $7.10 billion in the company. As of December 31, GQG Partners is the most prominent shareholder in the company and has a position worth $3.6 billion.

Jim Cramer is bullish on Exxon Mobil Corporation (NYSE:XOM), JPMorgan Chase & Co. (NYSE:JPM), UnitedHealth Group Inc. (NYSE:UNH), and Microsoft Corporation (NASDAQ:MSFT).

5. Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 84

Jim Cramer talked about Johnson & Johnson (NYSE:JNJ) and said that if the company was not going through litigation issues, its “stock would have soared after the quarter” since the company delivered “great” earnings. Cramer noted that the company’s medical devices segment performed “sharply better than expected”, however, he thinks that the company has to take care of its litigation issues as it can pressure its share price.

On April 18, Johnson & Johnson (NYSE:JNJ) announced earnings for the fiscal first quarter of 2023. The company’s revenue for the quarter grew by 5.63% year over year and amounted to $24.75 billion, outperforming Wall Street consensus by $1.15 billion. Johnson & Johnson (NYSE:JNJ) reported an EPS of $2.68 and beat expectations by $0.18.

84 hedge funds disclosed having stakes in Johnson & Johnson (NYSE:JNJ) at the end of Q4 2022. The total value of these stakes amounted to $5.57 billion. As of December 31, Bridgewater Associates is the largest shareholder in the company and has a stake worth $630 million.

4. JPMorgan Chase & Co. (NYSE:JPM)

Number of Hedge Fund Holders: 100

JPMorgan Chase & Co. (NYSE:JPM) is one of the “great” earnings reports Jim Cramer is talking about. Cramer noted that the company has shown that “it can make money in any environment, including one with no investment banking”. As of May 12, JPMorgan Chase & Co. (NYSE:JPM) has returned 12.60% to investors over the past 12 months.

JPMorgan Chase & Co. (NYSE:JPM) announced market-beating earnings for the fiscal first quarter of 2023, on April 14. The company reported earnings per share of $4.10 and outperformed EPS consensus by $0.73. The company’s revenue for the quarter amounted to $38.35 billion, up 24.85% year over year and ahead of market estimates by $2.61 billion.

JPMorgan Chase & Co. (NYSE:JPM) was spotted on 100 investors’ portfolios at the close of Q4 2022. These funds disclosed positions worth $5.17 billion in the company. As of December 31, Greenhaven Associates is the most prominent investor in the company and has disclosed a position worth $643 million.

Giverny Capital made the following comment about JPMorgan Chase & Co. (NYSE:JPM) in its Q1 2023 investor letter:

“This quarter marked the end of our third year in business. It has been a wild ride – launching at the start of the pandemic, watching a bubble in low-quality stocks and cryptocurrencies inflate and deflate, and generally living with a high level of volatility. On April 14, our holding JPMorgan Chase & Co. (NYSE:JPM) announced nice earnings for the first quarter and the stock rose 7%. In a truly efficient market, the largest, best- managed bank in America would not rise or fall 7% on a single data point. Yet, we see it regularly.”

3. UnitedHealth Group Inc. (NYSE:UNH)

Number of Hedge Fund Holders: 110

On April 14, UnitedHealth Group Inc. (NYSE:UNH) delivered strong earnings for the fiscal first quarter of 2023. The company reported an EPS of $6.26 and beat EPS estimates by $0.18. The company’s revenue for the quarter grew by 14.70% year over year and amounted to $91.93 billion, ahead of market expectations by $2.15 billion.

Cramer talked about UnitedHealth Group Inc. (NYSE:UNH) and said that the company’s “numbers were terrific, and its forecast (was) strong”. UnitedHealth Group Inc. (NYSE:UNH) is one of the “great” earnings reports Jim Cramer is talking about.

UnitedHealth Group Inc. (NYSE:UNH) was a part of 110 investors’ portfolios at the end of Q4 2022. These funds held stakes worth $11.4 billion in the company. As of December 31, GQG Partners is the top investor in the company and has a position worth $2.1 billion.

RiverPark Advisors made the following comment about UnitedHealth Group Incorporated (NYSE:UNH) in its Q1 2023 investor letter:

“UnitedHealth Group Incorporated (NYSE:UNH): We re-initiated a position in UnitedHealthcare, a position we last held in January of 2022. The company’s stock price had fallen roughly 17% from its peak in October 2021 on fears about Medicare reimbursement rates, and we used this dislocation to start purchasing shares of what we believe to be the most dominant and complete managed care company in the industry.

With several at-scale and interconnected businesses, UNH occupies a unique position within the U.S. healthcare system. UnitedHealth has (a) a dominant managed care organization in commercial, Medicare and Medicaid markets, (b) a large and growing presence in local care delivery (OptumHealth’s physicians and ambulatory service centers), (c) one of only three at scale pharmacy benefits managers (OptumRx’s PBM) and (d) a fast-growing healthcare information technology (HCIT), consulting and revenue cycle management (RCM) business (OptumInsight). The combination of the largest MCO (UnitedHealth) with the faster-growing, higher-margin Optum services businesses positions the company to capture a large portion of the future growth opportunities in the U.S. healthcare services industry. We expect balanced growth from both health insurance and health services leading to consistent high-single-digit revenue growth for the company. With margin expansion from scale, share buybacks from its strong cash generating ability (the company currently has $30 billion in net cash), and continued strategic acquisitions, we believe the company can generate mid-teens or better earnings growth for the foreseeable future.

UNH shares were down slightly from where we re-initiated a position during the quarter, causing them to be a top detractor (-0.02%) in an overall strong quarter where few positions were down.”

2. Visa Inc. (NYSE:V)

Number of Hedge Fund Holders: 177

Visa Inc. (NYSE:V) is one of the “great” earnings reports that Jim Cramer is talking about. He noted that the company “reported its usual strong results” and said that he would be a buyer of the stock as “its an amazing way to play the reversion to sanity in the fintech space”.

Visa Inc. (NYSE:V) delivered a market beating quarter. The company reported earnings for the fiscal second quarter of 2023, on April 25. The company reported earnings per share of $2.09 and outperformed EPS estimates by $0.10. The company’s revenue for the quarter amounted to $7.99 billion, up 11.07% year over year and ahead of Wall Street expectations by $194.11 million. Shares of Visa Inc. (NYSE:V) have gone up by 11.85% over the past 6 months, as of May 12.

Visa Inc. (NYSE:V) was held by 177 hedge funds at the end of Q4 2022. These funds held positions worth $22.4 billion in the company. As of December 31, TCI Fund Management is the top shareholder in the company and has a stake worth $4.1 billion.

Polen Capital made the following comment about Visa Inc. (NYSE:V) in its Q1 2023 investor letter:

“We trimmed Mastercard and Visa Inc. (NYSE:V) to equal weights of the Portfolio. Mastercard and Visa operate as a duopoly in a large and growing market. Over the last 50 years, global personal consumer expenditures (PCE) has grown 7-9% annualized. We expect 4-5% long-term PCE growth going forward. Additionally, the shift from cash to credit continues unabated, with a total credit penetration of only approximately 50% globally.3 This shift provides Visa and Mastercard with another ~4-6% of growth. When combined with PCE, this gives both companies high-single-digit to low-double[1]digit revenue growth opportunities. This growth estimate is before accounting for growth amplifiers like the acceleration of e[1]commerce, the shift from offline to online, and additional services. Both companies enjoy extremely strong network effects that provide strong competitive advantages.

We have trimmed Visa and Mastercard because their combined weight grew to over 12% of the Global Growth Portfolio because of their recent performance and to fund our increase in Amazon’s position size. We added to both positions when their prices were depressed due to cross-border transactions deteriorating materially from the pandemic. Cross-border volumes came roaring back when travel corridors reopened, and although we are several quarters removed from the cross-border nadir, Visa still grew volumes >30% in 1Q23. Total cross-border volumes are now 132% of 2019 levels. At 4.5% each, both companies remain high conviction positions for Global Growth.”

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 259

Cramer said that Microsoft Corporation (NASDAQ:MSFT) “stole the earnings season” and the company reported “great numbers across the board”. Cramer is bullish on the company’s AI initiatives and noted that it is “already using (AI) to generate games”. As of May 12, Microsoft Corporation (NASDAQ:MSFT) has returned 27.91% to investors over the past 6 months.

On April 25, Microsoft Corporation (NASDAQ:MSFT) reported strong earnings for the third quarter of fiscal 2023. The company generated a revenue of $52.86 billion, up 7.08% year over year and ahead of Wall Street consensus by $1.83 billion. The company reported an EPS of $2.45 and beat EPS expectations by $0.22.

259 hedge funds disclosed having stakes in Microsoft Corporation (NASDAQ:MSFT) at the close of the fourth quarter of 2022. The total value of these stakes amounted to $58.6 billion. As of December 31, Bill & Melinda Gates Foundation Trust is the dominant shareholder in the company and has a stake worth $9.1 billion.

Diamond Hill Capital made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its Q1 2023 investor letter:

“We did have several strong performing stocks this quarter. Our top contributors to return included NVR, Amazon, Alphabet, Microsoft Corporation (NASDAQ:MSFT) and Booking Holdings, all of which posted double-digit gains.

Shares of software and IT services provider Microsoft rallied as investors became less cautious about the potential for growth deceleration in Azure, its public cloud business, and more focused on opportunities in search after the company announced an investment in and long-term partnership with OpenAI, the company that developed ChatGPT. Microsoft’s net cash balance sheet also seemed to gain appreciation from investors who became more cautious about the economic cycle.”

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Disclosure: None. 10 “Great” Earnings Reports Jim Cramer is Talking About is originally published on Insider Monkey.