Jim Cramer spoke on his show Friday night about companies that he thought were poised to turn around. He covered a variety of different companies from different industries but the one variant that was the same was whether that company had earnings power. Here are Jim Cramer’s latest stock picks:
Ingersoll-Rand (IR): Cramer says that IR is set to be a “terrific turnaround story,” that is depending on the earnings reports. He continues by explaining that he thinks IR set the bar too high when some of their long-term profit targets, and that CEO Michael Lamach needs to accept ownership and accountability for mistakes while laying out a plan for the company’s future. IR reports its third quarter earnings on Thursday before the bell. IR recently traded at $30.53 a share and offers a dividend yield of 1.60%. It is forcasted to rise to $39.87 a share within the next 12 months.
Adobe Systems (ADBE): Cramer said Friday that he thinks ADBE will be “coming back to life.” The catalysts for that change is HTML 5, the next generation of web programming language that would allow people to embed audio or video directly into webpages, as opposed to having to use a host of sorts. Cramer thinks this will be especially big for people who want to develop applications for Apple products. ADBE is the first mover in this, and that comes with its own advantages. Cramer was quick to note that the software doesn’t come out until later in the year or possibly early 2012, so he is looking at it as a longer position. ADBE closed Friday at $26.81. It is forecast to rise to $31.25 in 12 months.
American Express (AXP): Cramer is taking a pass on AXP right now, waiting until it releases its earnings reports later this week. He noted that investors could try to “game” it, buying now and seeing what happens, but Cramer thinks waiting would be best. Cramer did note that his charitable trust owns a stake in AXP. AXP has a 1.60% dividend yield and closed Friday at $46.10. It is expected to bounce to $56.90 within the next year. Warren Buffett is also a fan. He keeps almost 15% of the Berkshire Hathaway fund invested in AXP (check more of Warren Buffett’s favorite stocks).
Corning (GLW): Cramer is bullish on GLW, citing the fact that the glass company recently increased its dividend. GLW also offers a 2.20% dividend yield. It closed Friday at $13.71 a share. It is expected to rise to $19.63 a share within the next 12 months. Lee Ainslie has more than $24 million of his Maverick Capital invested in GLW (see Lee Aislie’s top picks).
Coca-Cola Company (KO): Cramer is also bullish on KO. In spite of its recent downgrade, Cramer thinks KO is a well-run company and worth the investment. KO has a 2.80% dividend yield and recently traded at $67.85. It is expected to rise to $76.69 in the next year. Warren Buffett is also a fan. He famously has more than 25% of the Berkshire Hathaway fund in KO.
United Parcel Service (UPS): Cramer likes transports right now, and he is forecasting this one could go as high as $75 a share. It closed Friday at $68.96 a share. Analyst consensus puts the stock at $83.57 a share within the next 12 months. UPS also offers a 3.00% dividend yield. Jason Capello’s Merchants’Gate Capital has a stake worth over $252 million in UPS (read more about Jason Capello’s favorite picks)
FedEx (FDX): Cramer also likes UPS-rival FedEx, considering transports a definite buy. The stock closed Friday at $75.74 a share. It is expected to hit $97.04 a share within the next 12 months. FDX also offers a 0.70% dividend yield. Jason Capellos has almost just as much invested in FDX. His fund holds a $242.9 million position in the UPS-rival.
Dendreon (DNDN): Cramer thinks that this stock is too speculative. For its industry, Cramer likes other stocks better, particularly those with higher yield. DNDN closed Friday at $9.75 a share, down from its 52-week high of $43.96. It is expected to rise to $13.72 within the next 12 months. Steve Cohen, SAC Capital Advisors has more than $351 million in DNDN (check out what other stocks Steve Cohen likes).
Sanofi-Aventis (SNY): Cramer prefers SNY over DNDN. SNY has a 3.70% dividend yield and is currently trading at $35.42, down just over $5 from its 52-week high of $40.75. It is estimated to rise to $44.22 within the next year. Ken Fisher’s Fisher Asset Management has a $592 million stake in SNY (see more about Ken Fisher’s favorite stocks)
Xerox (XRX): Cramer is okay on XRX. XRX has a 2.20% dividend yield and closed Friday at $7.73 a share, near the low end of its 52-week range of 6.55. He doesn’t find anything objectionable, but, for his money, he prefers EMC. Christian Leone’s Luxor Capital Group holds more than $293 million in the company (see more of Christian Leone’s top picks).
EMC (EMC): Cramer is a big fan of data management company EMC. He definitely advocates a buy. EMC closed Friday at $23.09 a share. It is forecast to rise to $30.27 a share within the next 12 months. Bain Capital’s Brookside Capital has more than $405 million invested in EMC (check out more of Bain Capital’s favorite stocks)
UnitedHealth Group (UNH): Cramer was bullish on this group, at least until they ran into accounting issues. Besides, rate now Cramer is not recommending any healthcare plan providers until healthcare regulation has been sussed out. UNH has a 1.40% dividend yield. It closed trading Friday at $47.22 a share. It is expected to hit $59.30 in the next 12 months.
Patriot Coal (PCX): Cramer says that coal just as the place to be right now, and investors would be best to look elsewhere. PCX is currently trading at $10.83 a share. While some analysts are forecasting $22.16 a share one year out, Cramer thinks the stock will get to $12 a share, max.