In this article, we will take a look at the 10 Mad Money stock picks this week.
All indicators show that the Federal Reserve is ready to continue raising interest rates as it has more than enough reasons to stick to its hawkish stance. Bloomberg in a March 5 report said the Federal Reserve can raise interest rates “several more times to quell stubborn inflation.”
The Bloomberg report quoted Atlanta Fed President Raphael Bostic, who recently talked to reporters and said the following:
“I want to be completely clear: There is a case to be made that we need to go higher. Jobs have come in stronger than we expected. Inflation is remaining stubborn at elevated levels. Consumer spending is strong. Labor markets remain quite tight.”
The Federal Reserve’s resolve to control inflation and increase rates was more than clear when it recently submitted its semi-annual report to Congress. The Federal Reserve said that it remains “strongly committed to returning inflation to its 2% objective.”
“Let Them Get Slaughtered in their Bonds”
Jim Cramer recently gave his comments on the latest market situation in an episode of his “Mad Money” program on CNBC. Cramer said that the weakness in the market is “all anecdotal” right now. However, Cramer specifically said that those who believe rates are peaking right now are “too bullish.”
Cramer further said:
“Let them get slaughtered in their bonds.”
Cramer said that the market needs to see more soft data showing that the economic activity, wages and inflation are cooling before we get to see a real rally in the stock market.
Jim Cramer has time and again reiterated in his latest programs that history is not a guide in the current market environment as he’s been seeing a lot of unprecedented market and consumer behaviors recently. For example, while inflation remains stubborn and we keep reading reports of how the consumer is getting hammered, consistent data shows that the demand in the travel and tourism sector remains strong. Despite inflation, consumers are continuing to spend on hotels and flights. Cramer said that despite rising vacation prices and expensive hotels, people are spending on travel probably because they believe life is too short or what Cramer referred to as the “YOLO (You Only Live Once”) trend. Cramer said the Federal Reserve cannot make sense of these distortions.
“Nothing Makes Sense”
Jim Cramer believes there are too many “distortions” in the market right now and “nothing makes sense.” Cramer thinks the “discrepancies” at the moment are “too difficult to fathom.”
“Nothing in this economy is working like it’s supposed to. Nothing is predictable, and history is a terrible guide right now because we’ve never been in this situation before.”
Despite all of this, people are still interested in knowing what Jim Cramer has to say about US equities and to know which stocks Cramer believes should be piled into. Some notable stocks Jim Cramer has been talking about in his latest programs include Johnson & Johnson (NYSE:JNJ), Meta Platforms, Inc. (NASDAQ:META) and Tesla, Inc. (NASDAQ:TSLA).
Our Methodology
For this article, we watched several episodes of the Mad Money program of Jim Cramer on CNBC and picked the most notable stocks Cramer was recommending in late February and early March.
Mad Money Stock Picks This Week
10. Barrick Gold Corporation (NYSE:GOLD)
Number of Hedge Fund Holders: 40
A caller recently asked Jim Cramer about his previous call about Barrick Gold Corporation (NYSE:GOLD) and why the stock still hasn’t been able to cross the $20 market and instead sitting at around $16. Cramer promptly said that “I’ve been wrong” because of the price of gold not because “Barrick is bad.” Cramer said that Barrick Gold Corporation (NYSE:GOLD) is a “good company” and he continues to recommend the stock.
In February, Barrick Gold Corporation (NYSE:GOLD) posted its Q4 results. Adjusted EPS in the quarter came in at $0.13, beating estimates by $0.01. Revenue in the quarter fell about 16.3% on a YoY basis to reach $2.77 billion, missing estimates by $20 million.
A total of 40 hedge funds tracked by Insider Monkey had reported owning stakes in Barrick Gold Corporation (NYSE:GOLD) as of the end of the last quarter of 2022.
Old West Management made the following comment about Barrick Gold Corporation (NYSE:GOLD) in its Q4 2022 investor letter:
“Barrick Gold Corporation (NYSE:GOLD) is the second largest gold miner in the world, with operations in the U.S., Canada, Africa, South America and more. Barrick is also a major copper producer. Former Goldman Sachs executive John Thornton took control of the company in 2012 and quickly realized he wanted someone with a mining background to run the company. Mark Bristow, at that time CEO of Randgold, was considered one of the best gold mining executives in the world. Thornton wanted Bristow so badly Barrick bought Randgold in 2018. Bristow who is South African, had extensive experience operating mines throughout Africa, and in fact would fly his own single engine plane to visit mines. He has his PhD in Geology, and he has flourished running Barrick the past five years.
Barrick is estimated to have $1.6 billion of net income this year on $11.5 billion of revenue. Net Income has been growing 15% per year. The stock trades at $19.00 per share which is 16 times forward earnings, and the stock has a 3.15% dividend yield. Barrick has a fortress balance sheet with $5.7 billion in cash and $5 billion of long term debt, which is only one time EBITDA”
9. Cardinal Health, Inc. (NYSE:CAH)
Number of Hedge Fund Holders: 50
Jim Cramer said in a program earlier this month that Cardinal Health, Inc. (NYSE:CAH) is doing “really well” and he likes the stock. Cramer also likes Cardinal Health, Inc. (NYSE:CAH)’s restructuring. Like CAH, Jim Cramer is also bullish on Johnson & Johnson (NYSE:JNJ), Meta Platforms, Inc. (NASDAQ:META) and Tesla, Inc. (NASDAQ:TSLA).
Recently, Baird upgraded Cardinal Health, Inc. (NYSE:CAH) to Outperform from Neutral after the company raised its 2023 profit guidance following strong Q4 results.
Baird’s analyst Eric Coldwell said in a note to investors that Cardinal Health, Inc. (NYSE:CAH) “deserves to be on board for our positive drug distributor sector call.”
Cardinal Health, Inc. (NYSE:CAH) has over three decades of consistent dividend increases under its belt.
At the end of the last quarter of 2022, 50 hedge funds reported owning stakes in Cardinal Health, Inc. (NYSE:CAH). The total value of these stakes was $1.3 billion.
Ariel Investment made the following comment about Cardinal Health, Inc. (NYSE:CAH) in its Q3 2022 investor letter:
“Additionally, distributor of pharmaceutical and medical products Cardinal Health, Inc. (NYSE:CAH) advanced in the period as leadership changes were viewed to be a positive for shares. Management provided a new profit outlook for Fiscal 2023 and announced an improvement plan for the medical segment. We are encouraged by these changes and think CAH’s underlying fundamentals and competitive advantages around preventative maintenance screenings and medication management will continue to improve. We believe valuations of health care companies like CAH that focus on cost optimization and promote technological efficiency across the supply chain will be rewarded over the long term.”
8. Abbott Laboratories (NYSE:ABT)
Number of Hedge Fund Holders: 60
Jim Cramer earlier this month praised Abbott Laboratories (NYSE:ABT) and said that he likes the stock. Cramer likes Abbott Laboratories (NYSE:ABT)’s at-home COVID testing and anti-diabetes products.
Earlier in March, Abbott Laboratories (NYSE:ABT) said the FDA has cleared its FreeStyle Libre 2 and FreeStyle Libre 3 integrated continuous glucose monitoring (iCGM) system sensors for integration with automated insulin delivery (AID) systems.
In February, Abbott Laboratories (NYSE:ABT) declared a quarterly dividend of $0.51 per share, in-line with the previous dividend. Forward dividend yield at the time came in at 1.91%. The dividend is payable on March 15 to shareholders of record as of April 14.
At the end of the last quarter of 2022, 60 hedge funds tracked by Insider Monkey reported having stakes in Abbott Laboratories (NYSE:ABT). The total value of these stakes was about $3.2 billion.
Vulcan Value Partners made the following comment about Abbott Laboratories (NYSE:ABT) in its Q4 2022 investor letter:
“Abbott Laboratories (NYSE:ABT) is one of the largest and most diversified health care companies in the world. It operates in four segments: diagnostics, medical devices, nutritional products and established pharmaceuticals. The company quickly established itself as a global leader in the development and deployment of COVID-19 rapid diagnostic tests. Consequently, its revenue and profit growth accelerated during the pandemic. As demand for testing slowed to a more sustainable level, the company is facing difficult earnings comparisons. In addition, Abbott voluntarily recalled certain infant formula products and shut down a plant in Michigan where the products were manufactured, which put more pressure on its earnings comparisons. The plant has resumed production, and Abbott is regaining lost market share. We believe that these events, one positive and one negative, have distorted Abbott’s sustainable earning power and has given us an opportunity to purchase it with a margin of safety.”
7. Accenture plc (NYSE:ACN)
Number of Hedge Fund Holders: 63
Accenture plc (NYSE:ACN) is one of the most notable stocks Jim Cramer likes in the tech universe.
Jim Cramer recently said in his program that he likes Accenture plc (NYSE:ACN) and that the company is a leader in “many things” including AI.
Recently, Accenture plc (NYSE:ACN) acquired Morphus, a privately held Brazil-based cybersecurity company.
Accenture plc (NYSE:ACN) also announced recently that Accenture Federal Services, a subsidiary of the company, won a 10-year, $900 million Air Force digital engineering contract.
In January, MoffettNathanson analyst Lisa Ellis said in a note that companies like Accenture plc (NYSE:ACN) and IBM are well-positioned in digital transformation.
At the end of the fourth quarter of 2022, 63 hedge funds reported owning stakes in Accenture plc (NYSE:ACN). The net worth of these hedge funds’ stakes was $2.9 billion. The biggest hedge fund stakeholder of Accenture plc (NYSE:ACN) during this period was Guardian Capital’s GuardCap Asset Management which owns a $387 million stake in the company.
ClearBridge Sustainability Leaders Strategy made the following comment about Accenture plc (NYSE:ACN) in its Q4 2022 investor letter:
“Accenture plc (NYSE:ACN) is a leading global professional services company that helps clients build their digital infrastructure and optimize their operations. We view Accenture as a resilient, high-quality business with consistent earnings and cash flow, a strong balance sheet and very attractive returns on capital. Secular drivers like cloud migration and digital transformation, as well as new, innovative technology deployments like data security, block chain, AI and machine learning position Accenture well for continued growth. It is also currently rolling out a suite of sustainability tools that offers a comprehensive view of a company’s goals, progress and performance across financial and ESG measures, so it is an enabler of ESG for its clients. We exited our position in software-as-a-service company Workday to fund the position, largely on better relative risk/reward, in our view.”
6. Analog Devices, Inc. (NASDAQ:ADI)
Number of Hedge Fund Holders: 75
Jim Cramer recently said that Analog Devices, Inc. (NASDAQ:ADI) just had one of the best quarters in the semiconductor industry. He said this is the reason he likes Analog Devices, Inc. (NASDAQ:ADI). For the fiscal first quarter, Analog Devices, Inc. (NASDAQ:ADI) posted adjusted EPS of $2.75, beating estimates by $0.15. Revenue in the quarter jumped about 21% on a YoY basis to reach $3.25 billion, beating estimates by $100 million. For the fiscal second quarter of 2023, Analog Devices, Inc. (NASDAQ:ADI) expects its revenue to come in at about $3.20 billion +/- $100 million, versus the consensus of $3.04 billion. Analog Devices, Inc. (NASDAQ:ADI)’s adjusted EPS is expected to total $2.75, +/-$0.10, versus the consensus of $2.42.
Hedge fund sentiment for Analog Devices, Inc. (NASDAQ:ADI) is strong. At the end of the fourth quarter of 2022, 75 hedge funds reported owning stakes in Analog Devices, Inc. (NASDAQ:ADI), much higher than 66 hedge funds that reported having stakes in the company at the end of the third quarter. This shows that hedge funds were piling into Analog Devices, Inc. (NASDAQ:ADI) in the fourth quarter of 2022. The biggest hedge fund stakeholder of Analog Devices, Inc. (NASDAQ:ADI) was David Blood and Al Gore’s Generation Investment Management which owns an $838 million stake in the company.
Giverny Capital made the following comment about Analog Devices, Inc. (NASDAQ:ADI) in its Q4 2022 investor letter:
“Ashtead Group and Analog Devices, Inc. (NASDAQ:ADI) were new purchases, made in May. They both performed well from our original purchase prices and I believe we upgraded the quality of our portfolio by adding them.
We established four new positions during the year, each of about 2%: Analog Devices, Ashtead Group, Floor & Décor, and Installed Building Products. We discussed these in prior letters and I’m pleased to report that Ashtead and Analog were among our best performing positions for the year.”
In the next part we will see what Jim Cramer has been saying about Johnson & Johnson (NYSE:JNJ), Meta Platforms, Inc. (NASDAQ:META) and Tesla, Inc. (NASDAQ:TSLA).
5. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 76
Jim Cramer gave positive comments about Eli Lilly and Company (NYSE:LLY) in a Lightning Round of his program earlier this month. Cramer said that he is going to buy some more of Eli Lilly and Company (NYSE:LLY) stock for his charitable trust.
Recently, the US FDA granted an additional indication for Eli Lilly and Company (NYSE:LLY) Verzenio (abemaciclib) in combination with endocrine therapy as an adjuvant treatment for HR+, HER2- node-positive, early breast cancer at high risk of occurrence.
At the end of the fourth quarter of 2022, 76 hedge funds out of the 943 funds reported owning stakes in Eli Lilly and Company (NYSE:LLY). The total value of these stakes was about $5.2 billion. The most notable stakeholder of Eli Lilly and Company (NYSE:LLY) was Rajiv Jain’s GQG Partners which owns a $603 million stake in the company.
Baron Funds made the following comment about Eli Lilly and Company (NYSE:LLY) in its Q4 2022 investor letter:
“Eli Lilly and Company (NYSE:LLY) is a large-cap pharmaceutical company. Shares increased on investor optimism about Lilly’s new product pipeline, which includes Mounjaro for diabetes and obesity and Donanemab for Alzheimer’s disease. We continue to think Lilly has a healthy base business with limited near-term patent expirations, a strong pipeline, and potential for significant margin expansion, which should translate to strong revenue and earnings growth over at least the next five years.”
4. Union Pacific Corporation (NYSE:UNP)
Number of Hedge Fund Holders: 83
Answering a question about Union Pacific Corporation (NYSE:UNP) in the backdrop of the CEO’s departure, Jim Cramer said that it is a “great long-term play.” Recently, Barclays analyst Brandon R. Oglenski said that the railroad sector is seeing a lot of negative sentiment amid derailments, labor and demand concerns.
However, the analyst said that the industry’s fundamentals could improve in 2023 and that would minimize the downside risks. The analyst reiterated an Overweight rating for several rail road stocks, including Union Pacific Corporation (NYSE:UNP).
As of the end of the fourth quarter of 2022, 83 hedge funds reported having stakes in Union Pacific Corporation (NYSE:UNP). The net worth of these stakes at the end of the quarter was about $5.4 billion. The biggest hedge fund stakeholder of Union Pacific Corporation (NYSE:UNP) was Eric W. Mandelblatt’s Soroban Capital Partners which owns a $964 million stake in the company.
Here is what Diamond Hill Capital Management specifically said about Union Pacific Corporation (NYSE:UNP) in its Q2 2022 investor letter:
“Union Pacific Corporation (NYSE:UNP) is a large railroad company that carries freight across the western US and between Canada and Mexico. It transports a variety of industrial goods, raw materials and containerized freight between major US ports, industrial hubs and international gateways. The goods that Union Pacific and other railroads transport are fundamental inputs in the economy and are resilient to long-term trends in the business cycle. We believe Union Pacific offers a compelling investment opportunity as its substantial infrastructure investments, relative cost advantages, limited leverage and the essential nature of the products it delivers provides the company with what we believe is one of the widest moats in the transportation sector. We also like that Union Pacific has a shareholder-oriented management team that is focused on growing earnings while returning capital to shareholders.”
3. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 84
Jim Cramer discussed several healthcare stocks in his recent program and said that the latest market rotation out of the healthcare sector had no justifiable reason. He said that he spent some time looking at why healthcare stocks like Johnson & Johnson (NYSE:JNJ) and Merck were down but he could not find any reason. Cramer said the only reason these stocks fell is because it was the end of the month and a lot of funds were unloading their “losers.”
Earlier this month, latest data showed Johnson & Johnson (NYSE:JNJ) treatment’s long-term durable efficacy and safety in Crohn’s disease.
Johnson & Johnson (NYSE:JNJ) has upped its dividend for six decades without a break. This makes Johnson & Johnson (NYSE:JNJ) one of the best for recession scenarios.
Johnson & Johnson (NYSE:JNJ) is also one of the most popular stocks owned by hedge funds as of the end of the last quarter of 2022. 84 out of the 943 funds tracked by Insider Monkey had stakes in Johnson & Johnson (NYSE:JNJ). The total value of these stakes was $5.6 billion.
2. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 91
On February 27, Jim Cramer said in a tweet, “This could be explosive! Buy Tesla.” He said this while retweeting an advert for Cathie Wood’s interview on “Squawk on the Street.” In January, Jim Cramer in a program noted Tesla, Inc. (NASDAQ:TSLA)’s strong earnings and credited them for the broader market’s gains.
On March 6, Tesla, Inc. (NASDAQ:TSLA) made headlines after it was reported that the company slashed prices for Model X and Model S.
At the end of the fourth quarter of 2022, 91 hedge funds had stakes in Tesla, Inc. (NASDAQ:TSLA). The total value of these stakes was about $5.9 billion.
Baron Partners Fund made the following comment about Tesla, Inc. (NASDAQ:TSLA) in its Q4 2022 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) declined 54% in the quarter and detracted 26.62% from the Fund’s overall performance. We initiated our position in Tesla in February 2014 at a split-adjusted price of $11.91. Over the subsequent two years, we acquired 16.65 million shares for an average split-adjusted price of $14.22. At the time of our final purchase in February 2016, the stock represented 9.6% of the Fund’s total investments.
Tesla produced approximately 35,000 vehicles in 2014, the year of our initial purchase. In 2022, it produced 1.37 million vehicles. Not only has its production grown tremendously, but it has also significantly increased profitability per vehicle. Tesla has expanded from producing high performance electric vehicles for wealthy aficionados to a company that produces affordable luxury cars for a sizable audience. In turn, it has transformed its industry. Investors rewarded this expansion in both production and profits, and the stock price increased to $265.25 at the end of the third quarter. Since 2016, we sold 4.5 million shares, or 27.0% of the original holding, at an average price of $218.39.
Investors have recently become concerned about many external factors. Elon Musk is Tesla’s founder and CEO. His purchase of Twitter has negatively impacted the perception of Tesla’s brand in the short term. China’s COVID policies and outbreak have paused purchases and production in the company’s largest region. Global recessionary fears and upcoming Inflation Reduction Act incentives also caused some to delay new vehicle purchases in various markets…” (Click here to read the full text)
1. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 194
Jim Cramer gave some bullish comments about Meta Platforms, Inc. (NASDAQ:META) recently. He said that Mark Zuckerberg is one of the most “determined” people out there and Meta Platforms, Inc. (NASDAQ:META) will be able to “make money” for the shareholders.
In late February, Bank of America analysts listed some top companies that stand to benefit from the latest AI boom. Meta Platforms, Inc. (NASDAQ:META) was in the list, as BofA highlighted the company’s LLaMA large language model announcement.
Meta Platforms, Inc. (NASDAQ:META) is one of the most popular tech stocks among the 943 elite hedge funds tracked by Insider Monkey. As of the end of the last quarter of 2022, 194 hedge funds had reported owning stakes in Meta Platforms, Inc. (NASDAQ:META), much higher than 177 funds at the end of the previous quarter. The biggest hedge fund stakeholder of Meta Platforms, Inc. (NASDAQ:META) was Boykin Curry’s Eagle Capital Management which owns a $1.1 billion stake in the company.
Baron Fifth Avenue Growth Fund made the following comment about Meta Platforms, Inc. (NASDAQ:META) in its Q4 2022 investor letter:
“We also added to Meta Platforms, Inc. (NASDAQ:META) in the fourth quarter. Foreign currency movements and the weakening macro environment have impacted Meta’s revenue growth rates in the near term (revenues declined 4% year[1]over-year in the most recently reported third quarter), while investors continue to be focused on the company’s growing expenses and capital expenditures, which create a double-whammy impact on margins and free[1]cash-flow. This hyper-focus on the near term (driving the stock down 25% the day after earnings) overlooks the company’s long-term prospects, in our view. First, Meta has 2.9 billion daily active users and is growing (it was up 4% year-over-year). Second, Meta is already seeing significant user engagement for its Reels product that competes with TikTok. Reels reached 140 billion daily views across Facebook and Instagram, a 50% increase over the last 6 months, and, as importantly, Reels engagement has been incremental to time spent on the platform. Third, Reels is rapidly scaling its monetization, hitting a $3 billion revenue run-rate during the third quarter, up from $1 billion in the second quarter, and, based on rumored numbers for TikTok in 2022, likely already has a 15% to 25% market share since its standing start in 2021. Fourth, while the company continues growing its expenses, we are encouraged by the recent cost cutting announcements and believe that continued investment in AI-infrastructure will pay off, as the company works to regain the lost signal from Apple’s IDFA and ATT changes. Lastly, the sell-off in the shares resulted in a deeply undervalued stock for those investors willing to look out a few years, with its next-12-months earnings yield climbing above 9% during the quarter. This yield also compares to about 6% for the S&P 500 Index.”
You can also take a peek at 15 Best Short-Term Stocks to Buy and 10 Best Stocks to Buy for High Returns.
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Disclosure: None. 10 Mad Money Stock Picks This Week is originally published on Insider Monkey.
