In this article, we discuss the 10 stocks that Jim Cramer and billionaire Ray Dalio are betting on.
Ray Dalio, the chief of Bridgewater Associates, is one of the most respected hedge fund managers on Wall Street. His comments on the alarming situation at the stock market in the past few months have confirmed macro investors fears. Dalio recently warned that the aggressive monetary policies of the central bank in the United States would lead to stagflation, an economic condition that comes with high inflation where economic growth and employment are not robust enough, leading to stalled growth models that stop short of an all–out recession.
Jim Cramer, one of the ardent admirers of Dalio and a leading finance guru, has also echoed these sentiments. Both stalwarts, who have been investing at the stock market for decades, are bullish on names like Walmart Inc. (NYSE:WMT), Johnson & Johnson (NYSE:JNJ), and The Procter & Gamble Company (NYSE:PG) as the market shifts away from growth towards value to protect against volatility. Dalio manages an equity portfolio worth over $19 billion at the end of the third quarter of 2022 with the top holdings in the healthcare and consumer goods sectors.
Our Methodology
These were picked according to the investment portfolio of Bridgewater Associates at the end of the third quarter of 2022. Only stocks that Jim Cramer has also been bullish on in the past few weeks were selected. The analyst ratings of each company are also discussed to provide readers with some more context about their investment decisions. 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 and Billionaire Ray Dalio Are Betting on These Stocks
10. McDonald’s Corporation (NYSE:MCD)
Number of Hedge Fund Holders: 50
McDonald’s Corporation (NYSE:MCD) operates and franchises McDonald’s restaurants around the world. On November 29, McDonald’s said that its stores in Kazakhstan were forced to temporarily close this month after cutting ties with Russian companies and running out of supplies. Latest data shows that Dalio owned more than 2.1 million shares in the company at the end of the third quarter of 2022 worth $487 million. On September 1, Jim Cramer placed the company among a group of dividend-paying stocks that he was bullish on for the coming months. He said that it can resume the long march higher real soon and was the perfect “bounce-back candidate” despite recent overhangs like cost inflation and a strong dollar.
On October 28, RBC Capital analyst Christopher Carril maintained an Outperform rating on McDonald’s Corporation stock and raised the price target to $295 from $275, noting that the company’s third-quarter earnings highlighted the firm’s ability to play both offense and defense amid macro uncertainty.
At the end of the third quarter of 2022, 50 hedge funds in the database of Insider Monkey held stakes worth $2.3 billion in McDonald’s Corporation, compared to 58 in the previous quarter worth $2.7 billion.
Just like Walmart Inc., Johnson & Johnson, and The Procter & Gamble Company, McDonald’s Corporation is one of the stocks that Jim Cramer and Ray Dalio are bullish on.
9. Starbucks Corporation (NASDAQ:SBUX)
Number of Hedge Fund Holders: 55
Starbucks Corporation (NASDAQ:SBUX) operates as a roaster, marketer, and retailer of specialty coffee worldwide. On November 29, Starbucks announced that its Starbucks for Life, the sugar cookie-inspired beverages, were back. Regulatory filings show that Dalio owned more than 2.9 million shares in the company at the end of the third quarter of 2022 worth $252 million. Cramer discussed the stock during an appearance on CNBC on September 14, noting that the company had posted encouraging revenue growth and margin expansion numbers recently and also adding that the firm had invested extensively in technology to modernize the firm in recent months.
On November 4, Citi analyst Jon Tower maintained a Neutral rating on Starbucks Corporation stock and raised the firm’s price target to $93 from $90, noting that the company’s fiscal fourth-quarter results confirmed its business momentum in the US and improving international trends.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Starbucks Corporation with 5.8 million shares worth more than $444.7 million.
In its Q2 2022 investor letter, Matrix Asset Advisors, an asset management firm, highlighted a few stocks and Starbucks Corporation was one of them. Here is what the fund said:
“Starbucks Corporation is a premiere global coffee brand supported by over 32,600 stores across the world. The firm has a long history of beverage innovation and strong employee/barista relations with the firm paying above-market wages and benefits. Starbucks has a strong balance sheet and finances. The company generates steady and consistent cash flow, selling millions of cups of premium coffee every day. The company’s share price declined in part due to its large business in China which was largely shut down due to Covid restrictions and because of rising commodity and labor costs. We think the shares are attractively priced for a company that should grow 10% plus per year with a dividend yield of 2.6% at our average cost.”
8. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 60
The Coca-Cola Company (NYSE:KO) is a beverage company that manufactures, markets, and sells various non-alcoholic beverages worldwide. Securities filings show that Dalio owned more than 11.4 million shares in the company at the end of the third quarter of 2022 worth $642 million. Cramer recently named the firm among a basket of dividend-paying firms he was bullish on. Cramer said that the firm was “textbook defensive stock” since the high dividend yield offered investors protection from market swings.
On October 26, UBS analyst Peter Grom maintained a Buy rating on The Coca-Cola Company stock and raised the price target to $68 from $63, noting that the company’s third-quarter earnings beat was impressive as its organic growth more than offset incremental currency headwinds.
At the end of the third quarter of 2022, 60 hedge funds in the database of Insider Monkey held stakes worth $28 billion in The Coca-Cola Company, compared to 64 in the preceding quarter worth $29 billion.
In its Q2 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and The Coca-Cola Company was one of them. Here is what the fund said:
“Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We added to more defensive areas of the portfolio like consumer staples (The Coca-Cola Company). While the next month or two will likely prove choppy on account of the Omicron variant, we believe that Omicron, like Delta, represents a speed bump on the way to recovery rather than a true change in course. We see strong economic momentum continuing in 2022 and we expect interest rates to rise. After a decade of remarkably low rates, we would not be surprised if this change in direction is accompanied by some fits and starts in the markets. With our emphasis on pricing power, purposeful sector exposure, valuation discipline, and a strong dividend profile, we believe we are well-positioned for the year ahead.”
7. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 64
Costco Wholesale Corporation (NASDAQ:COST) engages in the operation of membership warehouses. On October 12, Costco declared a quarterly dividend of $0.90 per share. The forwarded yield was 0.77%. On November 28, Costco Dropped the Price on Its Internet-Famous Thomasville Sectional to Just $2,500 for Cyber Monday. 13F filings show that Dalio owned more than 1.9 million shares in the company at the end of the third quarter of 2022 worth $566 million. Cramer discussed the stock during an appearance on CNBC on September 14, noting that the company was building everywhere, including big projects in China, and did not want to raise their membership fees because it was part of a larger plan by the retail giant to pressure the competition.
On November 29, Deutsche Bank analyst Krisztina Katai maintained a Buy rating on Costco Wholesale Corporation stock and lowered the price target to $578 from $581.
Among the hedge funds being tracked by Insider Monkey, Washington-based Fisher Asset Management is a leading shareholder in Costco Wholesale Corporation with 4.3 million shares worth more than $2.1 billion.
In its Q2 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Costco Wholesale Corporation was one of them. Here is what the fund said:
“Portfolio gains were led by a diverse group of contributors. Also in consumer discretionary, Costco Wholesale Corporation, 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.”
6. PepsiCo, Inc. (NASDAQ:PEP)
Number of Hedge Fund Holders: 65
PepsiCo, Inc. (NASDAQ:PEP) manufactures, markets, distributes, and sells various beverages and convenient foods worldwide. On November 17, PepsiCo declared a quarterly dividend of $1.15 per share with a forward yield of 2.85%. New data reveals that Dalio owned more than 4 million shares in the company at the end of the third quarter of 2022 worth $656 million. Jim Cramer recently lauded the “other-wordly” numbers posted by the firm in a bear market.
On October 14, Barclays analyst Lauren Lieberman maintained an Overweight rating on PepsiCo, Inc. stock and raised the price target to $185 from $183, highlighting the company’s beat and raise in the third quarter.
At the end of the third quarter of 2022, 65 hedge funds in the database of Insider Monkey held stakes worth $5.3 billion in PepsiCo, Inc., compared to 62 in the previous quarter worth $4.9 billion.
Alongside Walmart Inc., Johnson & Johnson, and The Procter & Gamble Company, PepsiCo, Inc. is one of the stocks that Jim Cramer and Ray Dalio are bullish on.
In its Q2 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and PepsiCo, Inc. was one of them. Here is what the fund said:
“Also in the stable and predictable cash flow camp, though with a very different business model, global food and beverage company PepsiCo reported very strong organic growth in the first quarter, driven by healthy price/mix, and raised revenue guidance, while holding EPS guidance. Notably, its beverage business showed expanding margins.”
5. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 67
Walmart Inc. engages in the operation of retail, wholesale, and other units worldwide. On November 28, Walmart said it plans to donate $1 million to a United Way fund created following the mass shooting at one of the retailer’s locations in Virginia that left six dead. Regulatory filings show that Dalio owned more than 4 million shares in the company at the end of the third quarter of 2022 worth $522 million. Cramer has recently appreciated the strong earnings of the firm in light of inflation.
On November 17, Morgan Stanley analyst Simeon Gutman maintained an Overweight rating on Walmart Inc. stock and raised the price target to $164 from $150, highlighting the company’s beat & raise in the third quarter.
Among the hedge funds being tracked by Insider Monkey, Fort Lauderdale Florida-based investment firm GQG Partners is a leading shareholder in Walmart Inc. with 9.8 million shares worth more than $1.2 billion.
In its Q2 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Walmart Inc. was one of them. Here is what the fund said:
“The pandemic has created challenges for businesses large and small; one major challenge for large essential retailers such as ClearBridge holdings Home Depot, Walmart Inc. and Costco has been ensuring adequate staffing to meet demand under trying conditions. All three instituted enhanced pay practices during the pandemic, with raises, unplanned bonuses and other benefits helping compensate employees for their efforts in a difficult environment. In September 2020 Walmart raised wages for 165,000 employees, including several entry positions to $15 an hour. It followed this in February with a raise for 425,000 workers that moved its average pay above $15 an hour.”
4. The Proctor and Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 71
The Proctor and Gamble Company provides branded consumer packaged goods worldwide. On October 19, Procter & Gamble posted earnings for the first quarter of 2022, reporting earnings per share of $1.57, beating market estimates by $0.02. The revenue over the period was $20.61 billion, up 1.3% compared to the revenue over the same period last year and beating market estimates by $240 million. Securities filings show that Dalio owned more than 6.6 million shares in the company at the end of the third quarter of 2022 worth $835 million. Cramer recently said that consumer staples tend to do well during a recession as people will keep buying staples regardless of overall economic outlook. He has also highlighted the dividend history of the company, which goes back nearly six decades, as another reason to own the stock during an economic slowdown.
On November 22, Jefferies analyst Kevin Grundy maintained a Buy rating on The Procter & Gamble Company stock and raised the price target to $164 from $149, noting that despite trade-down risks, the company’s key focus remains on supply, sustainability, digital acumen and human capital.
At the end of the third quarter of 2022, 71 hedge funds in the database of Insider Monkey held stakes worth $5.5 billion in The Proctor and Gamble Company, compared to 72 in the preceding quarter worth $6.1 billion.
3. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 83
Johnson & Johnson researches and develops, manufactures, and sells various products in the healthcare field. On November 30, Johnson & Johnson said that it has developed digital solutions to reduce time spent in hospitals in Riyadh, Saudi Arabia. On November 24, Johnson & Johnson revealed that its esketamine nasal spray Spravato showed superior efficacy compared to quetiapine extended-release in adults with treatment-resistant major depressive disorder in a phase 3b trial. 13F filings show that Dalio owned more than 4.7 million shares in the company at the end of the third quarter of 2022 worth $769 million. Cramer has noted that the firm was one of the great American firms and that investors will not have time to buy the shares at such great prices if inflation were to fall.
On November 17, Credit Suisse analyst Trung Huynh initiated coverage of Johnson & Johnson stock with a Neutral rating and $170 price target, noting that improved valuation for the remaining businesses could pressure the company’s new dividend.
Among the hedge funds being tracked by Insider Monkey, Westport, Connecticut-based firm Ayrshire Capital Management is a leading shareholder in Johnson & Johnson with 34,860 shares worth more than $5.7 million.
In its Q2 2022 investor letter, Mayar Capital, an asset management firm, highlighted a few stocks and Johnson & Johnson was one of them. Here is what the fund said:
“Johnson & Johnson 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)
2. Mastercard Incorporated (NYSE:MA)
Number of Hedge Fund Holders: 146
Mastercard Incorporated (NYSE:MA) is a technology company that provides transaction processing and other payment-related products and services. On November 28, Mastercard said that Mastercard, Block’s Square unit, and Equifax are among a group of 40 companies that have teamed up to form the lobbying group FinTechs Canada. Latest data shows that Dalio owned more than 577,000 shares in the company at the end of the third quarter of 2022 worth $164 million. Cramer has outlined that he prefers the stock for its growth trends over other payment names.
On November 29, Redburn analyst Fahed Kunwar initiated coverage of Mastercard Incorporated stock with a Neutral rating, highlighting that the brand power of debit is fading as digital wallets grow.
At the end of the third quarter of 2022, 146 hedge funds in the database of Insider Monkey held stakes worth $13.9 billion in Mastercard Incorporated, compared to 137 in the previous quarter worth $14.99 billion.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Mastercard Incorporated was one of them. Here is what the fund said:
“The Fund’s holdings in the Payments and Information Services themes also contributed to relative performance. Within Payments, lower exposure to this lagging theme and outperformance of Mastercard Incorporated added the most value. These global payment networks are viewed as safe havens during market downturns but are also benefiting from resilient payment volumes and a sharp rebound in international travel.”
1. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 166
Visa Inc. (NYSE:V) operates as a payments technology company worldwide. On November 25, Visa revealed that its US payments volume in November increased 9% from a year ago, even after the company suspended its operations in Russia in March 2022, and was 10% in October 2022. Credit payments volume increased by 10% and debit volume rose by 8% Y/Y. Regulatory filings show that Dalio owned more than 1.2 million shares in the company at the end of the third quarter of 2022 worth $216 million. Cramer has lauded the firm as one with no risk from interest rate hikes.
On October 27, BMO Capital analyst James Fotheringham maintained an Outperform rating on Visa Inc. stock and lowered the price target to $241 from $257, noting that the company posted encouraging fourth-quarter results.
At the end of the third quarter of 2022, 166 hedge funds in the database of Insider Monkey held stakes worth $24 billion in Visa Inc., compared to 159 in the preceding quarter worth $28 billion.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Visa Inc. was one of them. Here is what the fund said:
“The Fund’s holdings in the Payments and Information Services themes also contributed to relative performance. Within Payments, lower exposure to this lagging theme and outperformance of Visa, Inc.. These global payment networks are viewed as safe havens during market downturns but are also benefiting from resilient payment volumes and a sharp rebound in international travel.”
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This article is originally published at Insider Monkey.
