In this article, we discuss 5 Jim Cramer stocks to watch in August. If you want to see more of Jim Cramer’s latest stock picks, click 10 Jim Cramer Stocks to Watch in August.
5. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 61
Mad Money’s Jim Cramer said in a Lightning Round on August 1 that Costco Wholesale Corporation (NASDAQ:COST) is the only retail stock he is bullish on. Cramer reiterated, “Don’t need anything [retail] but Costco”.
On July 27, Costco Wholesale Corporation (NASDAQ:COST) declared a $0.90 per share quarterly dividend, in line with previous. The dividend is payable on August 12, to shareholders of record as of July 29. 2022 marks the 19th consecutive annual dividend increase by Costco Wholesale Corporation (NASDAQ:COST).
On July 14, Deutsche Bank analyst Krisztina Katai upgraded Costco Wholesale Corporation (NASDAQ:COST) to Buy from Hold with a price target of $579, up from $525. Costco Wholesale Corporation (NASDAQ:COST) is one of the most consistent players in the retail sector, and its incremental traffic gains and increasing membership renewal rates “serve as key differentiators in an increasingly uncertain backdrop,” the analyst told investors in a research note. The analyst sees “meaningful share gains ahead” for Costco Wholesale Corporation (NASDAQ:COST) as consumers largely gravitate towards warehouse clubs to cut down on grocery trips and buy in bulk for better prices.
Among the hedge funds tracked by Insider Monkey, Ken Fisher’s Fisher Asset Management featured as the leading stakeholder of Costco Wholesale Corporation (NASDAQ:COST), with 4.2 million shares worth $2.4 billion. Overall, 61 hedge funds were bullish on the stock at the end of March 2022, up from 57 funds in the earlier quarter.
Here is what ClearBridge Investments Sustainability Leaders Strategy has to say about Costco Wholesale Corporation (NASDAQ:COST) in its Q4 2021 investor letter:
“Portfolio gains were led by a diverse group of contributors. Also in consumer discretionary, Costco, which operates a chain of membership-only big-box retail stores, continues to impress as it takes to share and becomes more relevant for the consumer even as the world opens up.”
4. Blackstone Inc. (NYSE:BX)
Number of Hedge Fund Holders: 61
Blackstone Inc. (NYSE:BX) is a New York-based alternative asset management firm engaged in real estate, private equity, hedge funds, credit, public debt, and multi-asset class strategies. When a viewer asked Jim Cramer in a Lightning Round on July 26 about Apollo Global Management, Inc. (NYSE:APO), he said he prefers Blackstone Inc. (NYSE:BX) instead.
Piper Sandler analyst Sumeet Mody reiterated an Overweight rating on Blackstone Inc. (NYSE:BX) and lowered the price target on the stock to $120 from $154. The analyst slashed earnings expectations following the Q2 results and in the second half of 2022, he forecasts pressured realization activity.
Among the hedge funds tracked by Insider Monkey, D E Shaw held the largest stake in Blackstone Inc. (NYSE:BX) at the end of the first quarter of 2022, comprising roughly 3 million shares worth $371.15 million. Overall, 61 hedge funds were bullish on the stock at the end of Q1 2022, compared to 62 funds in the prior quarter.
Here is what Aristotle Capital Management Value Equity has to say about Blackstone Inc. (NYSE:BX) in its Q1 2022 investor letter:
“Founded by its current CEO Stephen Schwarzman and Pete Peterson in 1985, Blackstone is one of the largest alternative asset managers in the world, with more than $880 billion of assets under management (AUM). The firm creates and manages investment vehicles that span asset classes globally and serve both institutional clients as well as high-net-worth individuals. Its core business segments include Real Estate (34% of fee-earning AUM), Credit and Insurance (31%), Private Equity (24%), and Hedge Fund Solutions (11%).
Blackstone has leveraged its broad product portfolio and enviable investment performance to not only raise substantial amounts of capital but also maintain its reputation as a one-stop shop for investors looking to gain exposure to alternative assets. In contrast to traditional asset managers that rely on investor inaction to keep redemption rates low, the products offered by alternative asset managers typically have lockup periods that prevent redemptions for a substantial amount of time (often 10+ years).
High-Quality Business
Some of the quality characteristics we have identified for Blackstone include:
-Reputable management team that has produced an admirable track record of investment performance and demonstrated its ability to raise capital (the firm is now 9x larger since its 2007 IPO);
-Stable client base and sticky asset base with 73% of its capital locked up for over 10 years; and
-Significant scale and strong brand that provides a myriad of advantages, including for distribution and new product launches.
Attractive Valuation
Based on our estimates of normalized earnings, we believe shares of Blackstone are offered at a discount relative to our estimate of intrinsic value. It is our view that current valuation does not appropriately reflect our estimated future levels of fee-based revenue.
Compelling Catalysts
Catalysts we have identified for Blackstone, which we believe will cause its stock price to appreciate over our three- to five- year investment horizon, include:
-Increased fee-based revenue as dry powder committed capital that has yet to be invested is deployed. As of the fourth quarter of 2021, there was a total of $136 billion in dry powder across the firm;
-Given its scale and sustained investment prowess, Blackstone is uniquely positioned to benefit from the secular shift in investor allocation away from traditional managers and toward less liquid and higher expected return strategies in the alternative asset management sector; and
-Further penetration in the retail and private wealth channel, a segment of investors that has historically been excluded from participating in alternative assets. Blackstone has a first-mover advantage in providing institutional-quality products across its expanding distribution teams that focus on financial advisors.”
3. Cheniere Energy, Inc. (NYSE:LNG)
Number of Hedge Fund Holders: 62
Cheniere Energy, Inc. (NYSE:LNG) is a Texas-based energy infrastructure company that specializes in liquefied natural gas businesses in the United States. Jim Cramer was extremely bullish on Cheniere Energy, Inc. (NYSE:LNG) recently. On July 26, in response to a viewer’s question about the stock on the Mad Money Lightning Round, he said “Buy, buy, buy it”.
On July 26, Cheniere Energy, Inc. (NYSE:LNG) declared a quarterly dividend of $0.33 per share, in line with previous. The dividend is payable on August 16, to shareholders of record on August 9. The company also announced a long-term deal to supply liquefied natural gas from the Corpus Christi Liquefaction project to the Thailand-based energy company PTT, where the latter plans to buy 1 million metric tons per year of LNG for 20 years from Cheniere Energy, Inc. (NYSE:LNG) beginning in 2026 through a combination of free-on-board and delivered ex-ship deliveries.
According to Insider Monkey’s data, Cheniere Energy, Inc. (NYSE:LNG) was part of 62 hedge fund portfolios at the end of March 2022, up from 52 funds in the last quarter. Carl Icahn’s Icahn Capital LP is the biggest shareholder of the company, with a position worth $1.3 billion.
Here is what ClearBridge Global Infrastructure Value Strategy has to say about Cheniere Energy, Inc. (NYSE:LNG) in its Q3 2021 investor letter:
“Cheniere Energy is an energy infrastructure company that owns and operates U.S. liquefied natural gas (LNG) export facilities. Strong quarterly results and the disclosure of capital allocation policies were positively received by the markets. In addition, continued supply and demand tightness in the LNG market created a favorable commodity price environment.”
2. Occidental Petroleum Corporation (NYSE:OXY)
Number of Hedge Fund Holders: 67
Occidental Petroleum Corporation (NYSE:OXY) is a Texas-based company with oil and gas properties in the United States, the Middle East, Africa, and Latin America. It operates through three segments – Oil and Gas, Chemical, and Midstream and Marketing. Jim Cramer said on Mad Money’s Lightning Round on July 28 that Occidental Petroleum Corporation (NYSE:OXY) is only going higher as Warren Buffett’s Berkshire Hathaway is buying it in droves.
On July 26, Barclays analyst Jeanine Wai reiterated an Overweight rating on Occidental Petroleum Corporation (NYSE:OXY) and lowered the firm’s price target on the shares to $79 from $84 ahead of the Q2 results.
According to Insider Monkey’s data, 67 hedge funds were bullish on Occidental Petroleum Corporation (NYSE:OXY) at the end of Q1 2022, up from 58 funds in the preceding quarter. Rajiv Jain’s GQG Partners is a significant position holder in the company, with 26.6 million shares worth $1.5 billion.
Here is what Smead Capital Management has to say about Occidental Petroleum Corporation (NYSE:OXY) in its Q3 2021 investor letter:
“Oil stocks dominated our winners for the quarter. We showed that we have unlimited ability to tempt fate by buying into Occidental Petroleum (OXY) this year after it was our biggest loser of 2020. It gained 16.64% during the third quarter.”
1. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 83
Johnson & Johnson (NYSE:JNJ) is an American multinational healthcare firm. When a viewer on a Lightning Round on July 26 enquired about GSK plc (NYSE:GSK), Cramer said he prefers Johnson & Johnson (NYSE:JNJ), noting “What’s not to like?” about the healthcare firm. Johnson & Johnson (NYSE:JNJ) is a reliable dividend king, with 60 consecutive years of annual dividend increases under its belt.
On July 21, UBS analyst Kevin Caliendo reaffirmed a Neutral rating on Johnson & Johnson (NYSE:JNJ) and lowered the firm’s price target on the shares to $180 from $185. The company’s Q2 results reiterated the macro headwinds, which include sizable forex movements, continuing inflation, and lagging elective procedure recovery, the analyst told investors in a research note. He added that China will possibly be a drag on MedTech, but at 5% of Johnson & Johnson (NYSE:JNJ)’s sales, the risk appears “largely contained”.
Among the hedge funds tracked by Insider Monkey, Arrowstreet Capital held the leading stake in Johnson & Johnson (NYSE:JNJ) as of Q1 2022, with 6.65 million shares worth $1.17 billion. Overall, 83 hedge funds were bullish on Johnson & Johnson (NYSE:JNJ) at the end of Q1 2022, with collective stakes worth $7.40 billion.
You can also take a look at This Analyst Is Bearish on These 15 Retail Stocks Amid “Soft Landing” Expectations and The 10 Stocks That Jim Cramer Is Talking About.
