Jim Cramer Latest Portfolio: 10 Best Stocks to Buy

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In this article, we will take a detailed look at Jim Cramer Latest Portfolio: 10 Best Stocks to Buy.

Jim Cramer in his latest program talked about discipline during short-term market rallies and emphasized the importance of knowing when to take some profits off the table when things are going your way. According to Cramer, the “most important lesson” in short-term rallies is that “you always have to work hard to prepare yourself for the future.”

Cramer said that you should not “give in” to the market euphoria and hit “buy, buy, buy” when the market is “roaring.” The CNBC host said for many it becomes difficult to sell because they feel they were late to the rally and want to hold on to their best-performing stocks during bull runs. But Cramer questioned this thinking: if your portfolio sees big gains and you let it “ride” the rally without selling any stocks and eventually those gains begin to “evaporate,” how is that different from totally missing out on the rally? “It isn’t,” Cramer said.

Cramer talked about the post-COVID rally of 2020 and 2021 where the market saw an “unbelievable” bull run, only to pare those gains after the Fed’s pivot and its “war” on inflation. Jim Cramer advised investors to always remain “tethered” to reality.

“If you would have sold stocks gradually on their way up as I told you to do you’d have been in a much better shape as the market spent the next 11 months getting obliterated,” said Cramer.

For this article we watched several latest programs of Jim Cramer aired over the past few days and picked 10 stocks he’s bullish on. With each stock we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Jim Cramer Latest Portfolio: 10 Best Stocks to Buy

10. H.B. Fuller Company (NYSE:FUL)

Number of Hedge Fund Investors: 18

Jim Cramer was recently asked about H.B. Fuller Company (NYSE:FUL) during his program on CNBC. Here’s what he said:

“It’s a great, little industrial company. It’s been around forever and you should buy it.”

Adhesives manufacturing company H.B. Fuller Company (NYSE:FUL) has been around for 130 years. Last year H.B. Fuller Company (NYSE:FUL) saw a 240 basis points growth EBITDA margins to 16.5% of sales, driven by positive factors related to pricing, cost controls and easing of inflationary pressures. Earlier this year H.B. Fuller Company (NYSE:FUL) raised its dividend by 8%, and also announced the acquisition of ND Industries. H.B. Fuller Company (NYSE:FUL) has been on a buying spree to expand its footprint. It has also acquired ZKLT Polymer Co., Ltd and Apollo Chemicals Limited.

As of December 2023, cash and cash equivalents of the company are worth $179 million, trade receivables stand at about $577 million.  The stock’s forward P/E ratio is 18, not much higher than the industry average of 15.65, given Wall Street expectation of 15.10% earnings growth for H.B. Fuller Company (NYSE:FUL) next year.

Average analyst estimate on the stock set by Wall Street is $93.83, which presents a 20% upside potential from the stock price on June 19.

9. AeroVironment Inc (NASDAQ:AVAV)

Number of Hedge Fund Investors: 20

American defense contractor AeroVironment Inc (NASDAQ:AVAV) is one of the stocks Jim Cramer is bullish on. Cramer said in a latest program that while the stock had a “very big run” – up 77% so far this year – he believes AeroVironment Inc (NASDAQ:AVAV) will get “more money” and recommended investors to hold on to the stock. Jim Cramer referred to US President Joe Biden’s visit to Europe and  the “new” deal he’s signing. President Joe Biden and Ukrainian President Volodymyr Zelenskyy signed a 10-year bilateral security agreement that includes a multibillion-dollar loan for Ukraine.

AeroVironment Inc (NASDAQ:AVAV) bulls believe the stock is poised to grow as the company makes advanced drone systems and robotics products that are in high demand amid the current geopolitical landscape. AeroVironment Inc (NASDAQ:AVAV) reported fiscal Q3 results in March, according to which its revenue jumped 40% in the period. Unmanned Systems segment revenue rose 23% year over year to $113 million. AeroVironment Inc (NASDAQ:AVAV) also raised its full-year guidance. It now expects about 30% full-year revenue growth and 38% higher adjusted EBITDA. Adjusted earnings in 2024 are now expected to rise by 119%. Based on these strong growth projections and catalysts, analysts believe now is the right time to pile into the stock.

8. Hewlett Packard Enterprise Co (NYSE:HPE)

Number of Hedge Fund Investors: 49

A caller recently asked Jim Cramer during his program whether he should buy HPE since Hewlett Packard Enterprise Co’s (NYSE:HPE) liquid cooling solutions are expected to see demand amid the AI data center boom.

“One hundred percent!,” replied Cramer.

Cramer said that he was skeptical of the stock but now he believes “it is just a terrific situation.”

Cramer said he had a lot of “back and forth” with his “friend” Herb Greenberg who has a lot of “positive comments” about the stock.

Hewlett Packard Enterprise Co (NYSE:HPE) recently entered into a partnership with Nvidia Corp. (NVDA) after which the companies will make solutions to allow companies to adopt generative-AI systems in a private-cloud configuration.

Hewlett Packard Enterprise Co (NYSE:HPE) CEO Antonio Neri recently revealed that the company has 300 patents in the area of direct liquid cooling.

Earlier this month, Argus upgraded the stock to Buy, citing “strong positioning and growing opportunity in the AI space.”

Argus analyst Jim Kelleher said in a note that Hewlett Packard Enterprise Co’s (NYSE:HPE) strong position in the ISS server and now GPU server compute market makes it a leading player to benefit in the AI and Cloud industry.

Hewlett Packard Enterprise Co’s (NYSE:HPE) recently reported Q2 report had several bright spots. The results showed that HPE’s server business is rebounding. The segment’s revenue was up 18% year over year while Hewlett Packard Enterprise Co’s (NYSE:HPE) AI systems revenue doubled to a whopping $0.9 billion from $0.4 billion in the year-ago quarter. Hewlett Packard Enterprise Co (NYSE:HPE) also increased its full-year revenue growth guidance to 1%-3% from 0%-2% previously anticipated. Adjusted EPS in the period is expected to come in the range of $1.85 to $1.95, from $1.82-$1.92 previously anticipated. Wall Street expects Hewlett Packard Enterprise Co (NYSE:HPE) earnings to grow 9% next year. Based on AI-related growth catalysts, Hewlett Packard Enterprise Co’s (NYSE:HPE) guidance looks conservative and its forward P/E ratio of 11.59 makes the stock undervalued.

7. Chevron Corp (NYSE:CVX)

Number of Hedge Fund Investors: 62

In a recent program, Jim Cramer said that he “likes” Chevron Corp (NYSE:CVX) because of its 4% dividend yield.

With 37 years of consistent dividend increases, oil giant Chevron Corporation (NYSE:CVX) is one of the best dividend growth stocks to buy according to hedge funds. Chevron Corporation (NYSE:CVX) has been paying dividends without a break since 1984. Its annual dividend growth rate over the past three years is 5.40%. Chevron Corporation (NYSE:CVX)’s payout ratio is  about 56%, which is higher than the industry mean of 45%, but given the company’s huge cash flows and strong fundamentals, dividend safety isn’t a major concern for Chevron Corporation (NYSE:CVX) investors.

Chevron Corp’s (NYSE:CVX) management has pledged fiscal discipline and caution amid massive swings in oil and commodity prices. Analysts believe Chevron Corp (NYSE:CVX) remains well-positioned in the Permian Basin and DJ Basin, with strong production numbers posted in the first quarter. In April, Chevron Corp’s (NYSE:CVX) management said it expects $80/BBL Brent in 2024 and guided for a 4% to 7% increase in total production in the year. Analysts believe this guidance was conservative as continued supply cuts from oil producers would support oil prices.

Analysts also believe now that Hess shareholders have approved Chevron Corp’s (NYSE:CVX) $53 billion acquisition of the company, the deal could go through and help Chevron expand and achieve its goals in Guyana.

Chevron Corp (NYSE:CVX) is expected to see earnings growth of 10.57% in 2025, much higher than Exxon’s 6.72% earnings growth. Given all these growth catalysts, strong fiscal position and dividends, the stock is undervalued, at a forward P/E ratio of 13.89.

Carillon Eagle Growth & Income Fund stated the following regarding Chevron Corporation (NYSE:CVX) in its fourth quarter 2023 investor letter:

“Chevron Corporation (NYSE:CVX) traded lower, along with oil prices, and issued a disappointing earnings announcement due to overseas refining losses. Separately, the company announced an agreement to buy another energy company with operations offshore of Guyana, as well as in North Dakota, the Gulf of Mexico, and the Gulf of Thailand. This is a strategic acquisition for very little takeout premium.”

6. ConocoPhillips (NYSE:COP)

Number of Hedge Fund Investors: 62

When asked about ConocoPhillips (NYSE:COP) in a latest program, Jim Cramer said that if you got to own an oil company, “I say you own ConocoPhillips.”

Analysts believe ConocoPhillips’ (NYSE:COP) $22.5 billion acquisition of Marathon Oil would give the company a strong boost and expand its footprint in the Permian. ConocoPhillips (NYSE:COP) expects to capture synergies worth $500 million per year from the deal mainly due to the reduction in G&A expenses.

ConocoPhillips (NYSE:COP) has already benefitted significantly from the rise in oil prices following Russia’s attack on Ukraine. Over the past three years it cut its share count by 13%. ConocoPhillips (NYSE:COP) expects to earn $10 per share next year, and if we add Marathon’s $3 per-share earnings, the total EPS estimate for the year translates to $13 per share. Wall Street expects ConocoPhillips’ (NYSE:COP) earnings to grow 12% next year. Following the close of the Marathon Deal, ConocoPhillips expects to buy back $20 billion worth of stock over three years. ConocoPhillips (NYSE:COP) also expects to increase its ordinary base dividend by 34% to 78 cents per share starting in the fourth quarter of 2024. All of this would bode extremely well for COP shareholders. Wall Street analysts have an average price target of $ 143.91 on the stock, which presents a 31% upside from the current levels.

5. DraftKings Inc (NASDAQ:DKNG)

Number of Hedge Fund Investors: 64

A caller recently asked Jim Cramer whether DraftKings Inc (NASDAQ:DKNG) is a Sell or a Hold. Cramer said it’s a Buy because the stock has come “down all the way.” Cramer thinks DraftKings is in “good shape.”

Morgan Stanley analyst Stephen Grambling recently called DraftKings Inc (NASDAQ:DKNG) a top pick in the US gaming and lodging sector. The analyst said DraftKings Inc (NASDAQ:DKNG) reiterating its guidance despite the tax hike on sports betting in Illinois shows underlying business strengths.

“Our unchanged 12-month price target of $51 is based on an unchanged 50/50 weighting of ~14x 2026 EV/EBITDA discounted back at a ~13% cost of capital ($45 value) plus our DCF of $56 using a terminal growth rate of 2.5%, WACC 9.25%, and longterm leverage of ~2x (~30% of EV),” the analyst said.

Earlier this month, Bank of America also added DraftKings Inc (NASDAQ:DKNG) to its US 1 List. The list includes some of the firm’s best investment ideas that are drawn from the large universe of Buy-rated, U.S.-listed stocks.

In May DraftKings Inc (NASDAQ:DKNG) reported strong Q1 results and increased its full-year guidance. DraftKings now expects a revue of $4.9 billion (growth of 33.9% YoY)  and Adjusted EBITDA guidance to $500 million (growth of 431% YoY) in the period. Average analyst estimate set by Wall Street on the stock is $52.20, which shows a 20% upside from the current levels.

Baron Discovery Fund stated the following regarding DraftKings Inc. (NASDAQ:DKNG) in its first quarter 2024 investor letter:

“Shares of DraftKings Inc. (NASDAQ:DKNG), a leading online sportsbook in the U.S., rose during the quarter following an earnings release that showed strong market share gains and an improved outlook for future profitability. Market share capture has been driven by investment in innovative product offerings that are resulting in strong customer retention. The company also announced the acquisition of JackPocket, a digital lottery courier service. We believe the acquisition will help DraftKings achieve a first-mover advantage in many states that offer the JackPocket service but have not yet legalized online sports betting and casino gaming. DraftKings is well positioned to expand margins and generate positive free cash flow as it grows revenues alongside the rapidly expanding U.S. sports betting market, in our view.”

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