In this article, we discuss the 10 Jim Cramer stock picks this week.
Jim Cramer is a former hedge fund manager who hosts the Mad Money show on news platform CNBC. He also runs the CNBC Investing Club and is the co-founder of finance publication The Street. His net worth, as of the end of November 2022, was in excess of $150 million. Cramer is considered a leading expert on the US stock market as he has been involved in stocks for the best part of three decades and finished his hedge fund career with returns of over 24%, becoming a finance guru between 1987 and 2001.
Cramer recently underlined recent comments from Jerome Powell, the chief of the central bank, and noted they had given investors the green-light to invest in stocks. Cramer reminded investors who were worried about the economy tipping into recession that a crisis was still avoidable and there were many segments of the market that could be potential winners in 2023. Some of the stocks that Cramer is bullish on heading into 2023 include The Walt Disney Company (NYSE:DIS), Bank of America Corporation (NYSE:BAC), and The Procter & Gamble Company (NYSE:PG).
Our Methodology
These were picked keeping in mind the latest calls that Cramer made on these equities on his Mad Money show aired by news platform CNBC. Data from around 900 elite hedge funds tracked by Insider Monkey in the third quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.
Jim Cramer Stock Picks This Week
10. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 75
Eli Lilly and Company (NYSE:LLY) discovers, develops, and markets human pharmaceuticals worldwide. On December 20, during his Mad Money show on CNBC, Jim Cramer outlined his bullish stance towards the drug firm, singling out the Mounjaro product. The popular investor said that Mounjaro was like a license to print money. Mounjaro is a drug made by the pharma firm for weight loss.
On December 15, UBS analyst Colin Bristow maintained a Buy rating on Eli Lilly and Company (NYSE:LLY) stock and lowered the price target to $420 from $428, highlighting that central tenet of the firm’s thesis is very much intact, with the positive GGG update potentially securing Eli Lilly’s dominant positioning in obesity during the out years.
At the end of the third quarter of 2022, 75 hedge funds in the database of Insider Monkey held stakes worth $5.5 billion in Eli Lilly and Company (NYSE:LLY), compared to 70 the preceding quarter worth $6.7 billion.
Just like The Walt Disney Company (NYSE:DIS), Bank of America Corporation (NYSE:BAC), and The Procter & Gamble Company (NYSE:PG), Eli Lilly and Company (NYSE:LLY) is one of the stocks that Jim Cramer is bullish on.
In its Q3 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Eli Lilly and Company (NYSE:LLY) was one of them. Here is what the fund said:
“In the U.S., we initiated a position in pharmaceutical maker Eli Lilly (NYSE:LLY) as it brings out new drug candidates for diabetes and Alzheimer’s disease. New drugs impact diabetes but have also demonstrated significant weight loss for patients who are overweight and have other co-morbidity issues as a result. Lilly is one of the two key players in diabetes care and we believe the potential market opportunity is much higher than the consensus forecasts as we are seeing evidence of accelerating adoption.”
9. Humana Inc. (NYSE:HUM)
Number of Hedge Fund Holders: 76
Humana Inc. (NYSE:HUM) operates as a health and well-being company in the United States. On December 20, during his Mad Money show on CNBC, Jim Cramer outlined his bullish position on the health and well-being firm, noting that the stock was a great turnaround story.
On December 13, Goldman Sachs analyst Nathan Rich upgraded Humana Inc. (NYSE:HUM) to Buy from Neutral with a price target of $652, up from $575, noting that company’s improved competitive positioning in Medicare Advantage has reaccelerated member growth for 2023 and could deliver multiple years of share gains as many peers face Stars headwinds in 2024.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Humana Inc. (NYSE:HUM) with 1.2 million shares worth more than $557.6 million.
In its Q3 2022 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and Humana Inc. (NYSE:HUM) was one of them. Here is what the fund said:
“Humana Inc. (NYSE:HUM) has held up well amid volatile markets given the characteristics of the Medicare Advantage market and expectations that it can return to market growth in the 2023 annual enrollment period. We are confident in Humana’s value creation plan and ability to get back to market enrollment growth in addition to an increasing contribution from its health care services businesses. Shares of Texas Instruments outperformed as the COVID lockdowns eased in China, and customers could accept the product shipments leading to an upside in expectations.”
8. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 85
Johnson & Johnson (NYSE:JNJ) researches and develops, manufactures, and sells various products in the healthcare field. On December 20, Jim Cramer placed the healthcare firm among a basket of stocks that he said would be winners in 2023. Previously, Cramer has said that the firm is a textbook recession-proof stock and exactly the kind of name you want to own when the Federal Reserve decides to slam the brakes on the economy.
On December 12, Citi analyst Joanne Wuensch kept a Buy rating on Johnson & Johnson (NYSE:JNJ) stock and raised the price target to $205 from $198, noting that in 2023 many headwinds remain for the North America medical supplies and technology group, but these should ease in the second half of next year.
Among the hedge funds being tracked by Insider Monkey, Camas, Washington-based firm Fisher Asset Management is a leading shareholder in Johnson & Johnson (NYSE:JNJ) with 5.9 million shares worth more than $967.3 million.
In its Q2 2022 investor letter, Mayar Capital, an asset management firm, highlighted a few stocks and Johnson & Johnson (NYSE:JNJ) was one of them. Here is what the fund said:
“Johnson & Johnson (NYSE:JNJ) is currently our largest position and a long-standing holding. The majority of the group’s sales come from its collection of pharmaceutical franchises, but a large majority (~45%) comes from its collection of medical device businesses and its consumer brands.
Here’s how JNJ make and spends a dollar of revenues: As of 2021, about 55 cents of that dollar comes from its pharmaceutical sales – sales of drugs to pharmacies and distributors – while 30 cents come from the sale of medical devices, such as surgery equipment and orthopaedics. The rest of that dollar in sales comes from sales of JNJ’s consumer brands such as Listerine mouthwash, Nicorette nicotine tablets and Neutrogena cosmetics (…read more)
7. Caterpillar Inc. (NYSE:CAT)
Number of Hedge Fund Holders: 43
Caterpillar Inc. (NYSE:CAT) manufactures and sells construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. On December 20, during his Mad Money show on CNBC, Jim Cramer gave a bullish thesis on the firm, noting that the stock had much more exposure to infrastructure, and also had a boost coming from the oil and gas industry. Cramer added that the shares were definitely worth owning at 17 times earnings.
On December 19, Stifel analyst Stanley Elliott maintained a Buy rating on Caterpillar Inc. (NYSE:CAT) stock and raised the price target to $271 from $260, noting that it is expected that the price/cost environment will generally improve, including slowness in housing.
At the end of the third quarter of 2022, 43 hedge funds in the database of Insider Monkey held stakes worth $2.8 billion in Caterpillar Inc. (NYSE:CAT), compared to 45 in the previous quarter worth $3.2 billion.
In its Q1 2022 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and Caterpillar Inc. (NYSE:CAT) was one of them. Here is what the fund said:
“We also initiated a position in Caterpillar (NYSE:CAT), one of the world’s leading manufacturers of construction and mining equipment. It’s a company we know well, as we have owned it in our large-cap portfolio for quite some time. Recent share price weakness provided an opportunity for us to add it to our large-cap concentrated portfolio at an attractive discount to our estimate of intrinsic value. We believe Caterpillar stands to benefit from increased capital investment supported by a healthier/recovering end market environment, particularly in construction and mining.”
6. Deere & Company (NYSE:DE)
Number of Hedge Fund Holders: 57
Deere & Company (NYSE:DE) manufactures and distributes various equipment worldwide. On December 20, Jim Cramer gave his take on the firm during his Mad Money show on CNBC, placing it among a basket of stocks that he thought would be winners in 2023 and also end 2022 as outperformers of the broader market.
On December 19, investment advisory Stifel maintained a Buy rating on Deere & Company (NYSE:DE) stock and raised the price target to $477 from $475. Analyst Stanley Elliott issued the ratings update.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Bill & Melinda Gates Foundation Trust is a leading shareholder in Deere & Company (NYSE:DE) with 3.9 million shares worth more than $1.3 billion.
Along with The Walt Disney Company (NYSE:DIS), Bank of America Corporation (NYSE:BAC), and The Procter & Gamble Company (NYSE:PG), Deere & Company (NYSE:DE) is one of the stocks that Jim Cramer is bullish on.
In its Q3 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Deere & Company (NYSE:DE) was one of them. Here is what the fund said:
“For example, we believe that farm equipment manufacturer Deere & Company (NYSE:DE) continues to benefit from both a strong farm economy and product innovations that directly benefit farmers’ productivity while also reducing their environmental footprint. The company has also demonstrated excellent execution, highlighted by capturing market share and maintaining margins despite dealing with a labor strike and elevated supply chain costs.”
5. The TJX Companies, Inc. (NYSE:TJX)
Number of Hedge Fund Holders: 55
The TJX Companies, Inc. (NYSE:TJX) operates as an off-price apparel and home fashion retailer. On December 20, during his Mad Money show on CNBC, Jim Cramer outlined his bullish position on the retailer, noting that while retail is truly awful right now, it is not uniformly awful and most stores may be struggling, but there were a few that are doing quite well. He added that The TJX Companies, Inc. (NYSE:TJX) stock was definitely a buy.
On December 6, Cowen analyst John Kernan maintained an Outperform rating on The TJX Companies, Inc. (NYSE:TJX) stock and raised the price target to $85 from $84, noting that the company’s opportunities across apparel, footwear, accessories, home, beauty, and kids are improving.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm BlueSpruce Investments is a leading shareholder in The TJX Companies, Inc. (NYSE:TJX) with 5.4 million shares worth more than $332.3 million.
In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and The TJX Companies, Inc. (NYSE:TJX) was one of them. Here is what the fund said:
“The pandemic created opportunities for us to be more aggressive in a variety of areas of the market. We were opportunistic throughout the year, for example, in positioning the portfolio to benefit from a flush consumer eager to return to spending and traveling. New positions included The TJX Companies, Inc. (NYSE:TJX), an off-brand retailer with a large presence in the U.S. and Europe that should continue to benefit from the contraction of many traditional retailers, particularly as consumer spending resumes.”
4. Morgan Stanley (NYSE:MS)
Number of Hedge Fund Holders: 52
Morgan Stanley (NYSE:MS) is a financial holding company that provides various financial products and services to corporations, governments, financial institutions, and individuals in the Americas, Europe, the Middle East, Africa, and Asia. On December 20, Jim Cramer said during his Mad Money show on CNBC that he liked Morgan Stanley stock heading into 2023 because higher rates are huge for their bottom line.
On December 20, Citi analyst Keith Horowitz maintained a Buy rating on Morgan Stanley (NYSE:MS) stock and raised the price target to $100 from $90, noting that the company’s market valuations and trading outlook were updated.
At the end of the third quarter of 2022, 52 hedge funds in the database of Insider Monkey held stakes worth $3.3 billion in Morgan Stanley (NYSE:MS), compared to 58 in the preceding quarter worth $2.99 billion.
In its Q3 2022 investor letter, Madison Funds, an asset management firm, highlighted a few stocks and The Morgan Stanley (NYSE:MS) was one of them. Here is what the fund said:
“This quarter we are highlighting Morgan Stanley (NYSE:MS) as a relative yield example in the Financial sector. MS is a leading investment bank and wealth management firm with approximately $5 trillion of client assets under management. It merged Citigroup’s Smith Barney business into its own wealth management business after the 2008 recession/financial crisis, which resulted in a more stable business model. Recent acquisitions of asset manager Eaton Vance and E-Trade provide additional stability and higher returns on capital. We believe MS has a sustainable competitive advantage due to its size and scale, global reach, strong reputation, and financial distribution capabilities. Importantly for a financial institution, it is in good financial health as key leverage ratios including common equity Tier 1 ratio, Tier 1 capital ratio, Tier 1 leverage ratio, and supplementary leverage ratio were all well above required minimums at the end of 2021.
Our thesis on MS is that its wealth management business will continue to become a larger part of the overall company, which will increase overall margins and return on equity (ROE). Wealth management and asset management are less cyclical than investment banking, and often generate higher margins and provide better stability of financial results. For example, the addition of Smith Barney added significant scale and boosted wealth management operating margins from below 10% into the mid-20%s over the past several years while also increasing returns on equity. Looking ahead, we believe the company will benefit from rising asset prices and higher interest rates, should they happen over time…read more
3. S&P Global Inc. (NYSE:SPGI)
Number of Hedge Fund Holders: 90
S&P Global Inc. (NYSE:SPGI) provides credit ratings, benchmarks, analytics, and workflow solutions in the global capital, commodity, and automotive markets. On December 20, Jim Cramer said in his Mad Money show, which was aired on CNBC, that banks were all in the negative territory for the year, down more than 27%. He added that they should have done much better, singling out S&P Global as one of those that had done better heading into 2023.
On December 2, Morgan Stanley analyst Toni Kaplan maintained an Overweight rating on S&P Global Inc. (NYSE:SPGI) stock and raised the price target to $390 from $378 post the investor’s day meeting where management introduced 2023 and 2025-2026 financial targets.
Among the hedge funds being tracked by Insider Monkey, London-based firm TCI Fund Management is a leading shareholder in S&P Global Inc. (NYSE:SPGI) with 8.8 million shares worth more than $2.7 billion.
In its Q3 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and S&P Global Inc. (NYSE:SPGI) was one of them. Here is what the fund said:
“Shares of rating agency and data provider S&P Global Inc. (NYSE:SPGI) fell 9% during the third quarter due to continued weak debt issuance activity and headwinds to the Indices business from equity market declines. Credit markets were exceptionally soft during the quarter with non-financial corporate bond issuance down 36% for investment grade and down 84% for high yield, reflecting greater investor risk aversion, rising interest rates, and a drop-off in M&A activity. We believe this ratings weakness is temporary and diversification benefits from the acquisition of IHS Markit should support earnings growth next year. Over the long term, the company should continue benefiting from the secular trends of increasing bond issuance, growth in passive investing, and demand for data and analytics, while enjoying meaningful and durable competitive advantages that, in our view, are only strengthening following the merger with IHS Markit.”
2. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 90
Wells Fargo & Company (NYSE:WFC) provides banking, investment, mortgage, and consumer and commercial finance products and services in the United States and internationally. On December 20, Jim Cramer said during his Mad Money show that banks, including Wells Fargo, could be tremendous performers if the Fed stopped bringing the pain at some point in 2023. Cramer also called the stock a great turnaround story for 2022.
On December 21, Citi analyst Keith Horowitz maintained a Buy rating on Wells Fargo & Company (NYSE:WFC) stock and lowered the price target to $48 from $50, noting that the company’s settlement with the consumer financial protection bureau is said to be a costly step forward.
At the end of the third quarter of 2022, 90 hedge funds in the database of Insider Monkey held stakes worth $6.2 billion in Wells Fargo & Company (NYSE:WFC), compared to 84 in the preceding quarter worth $7.2 billion.
In its Q3 2022 investor letter, Oakmark Funds, an asset management firm, highlighted a few stocks and Wells Fargo & Company (NYSE:WFC) was one of them. Here is what the fund said:
“Wells Fargo & Company (NYSE:WFC) has been a long-time holding in the Oakmark Fund. Despite the positives of higher interest rates and the company making good progress on reducing expenses and regulatory consent orders, Wells Fargo shares have fallen one-third from their highs earlier this year to roughly 6.5x our estimate of normalized earnings power, and the stock ended the quarter at ~1x next year’s tangible book value. We find this is far too cheap for a strong banking franchise capable of tangible returns in the low-to-mid teens across business cycles.”
1. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 110
UnitedHealth Global Incorporated (NYSE:UNH) operates as a diversified health care company in the United States. On December 20, Jim Cramer said that the firm was a best-of-breed healthcare stock, a boring, consistent operator with consistent results, nice dividends and reasonable value.
On December 7, Credit Suisse analyst A.J. Rice maintained an Outperform on UnitedHealth Group Incorporated (NYSE:UNH) stock and raised the price target to $610 from $590, noting that the valuation is rolled forward to 2024 without any changes.
Among the hedge funds being tracked by Insider Monkey, Fort Lauderdale, Florida-based investment firm GQG Partners is a leading shareholder in UnitedHealth Global Incorporated (NYSE:UNH) with 3.2 million shares worth more than $1.6 billion.
In its Q3 2022 investor letter, Stewart Asset Management, an asset management firm, highlighted a few stocks and UnitedHealth Global Incorporated (NYSE:UNH) was one of them. Here is what the fund said:
“Looking at the Great Recession which began at year-end 2007 and lasted to mid-year 2009 is helpful too. Our four largest current holdings in the portfolio weathered that period well. UnitedHealth’s (NYSE:UNH) earnings were resilient. While it reported modestly down earnings in 2008, its earnings rebounded quickly to record highs in 2010 and the shares responded strongly in anticipation of this.”
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Disclosure. None. 10 Jim Cramer Stock Picks This Week is originally published on Insider Monkey.
