In this article, we take a look at 10 stocks that received bullish comments from Jim Cramer recently. You can skip the discussion on Jim Cramer’s history and investment philosophy and go directly go to Jim Cramer Loves These 5 Stocks.
Jim Cramer is the man behind CNBC Investing Club and the host of CNBC “Mad Money.” Cramer is one of the founders of TheStreet.com, where he contributed for over 25 years. Along with that, he has authored numerous best-selling books.
Cramer was born in Wyndmoor, Pennsylvania, in 1955 and attended Springfield Township High School in Montgomery Country, Pennsylvania. He started to study stocks in fourth grade and maintained this habit for the rest of his life. One of his starting jobs at the age of 16 was to sell Coca-Cola and ice cream during the Philadelphia Phillies games at the Veterans Stadium. At the age of 22, he obtained a Bachelor of Arts degree as a magna cum laude scholar from Harvard University. His area of specialization was the government. He was a National Merit Scholar and the president and editor-in-chief of the Harvard Crimson during his stay at Harvard.
After completing his studies, he started as an entry-level reporter with an annual salary of $15,000. He was one of the earliest reporters to cover the Ted Bundy murders in Tallahassee, Florida while working for Tallahassee Democrat. Cramer worked for other newspaper publications sporadically before getting his Juris Doctor degree from Harvard Law School in 1984. He covered his tuition fees by putting his trading skills to use.
Hedge Fund Performance
Cramer joined Goldman Sachs at the age of 29 in the sales and trading department but left his job in 1987 to start his hedge fund. He raised $450 million and kept a fee of 20% on the generated profit. Cramer claims that he sold all his holdings before Black Friday in 1987. During the period between 1988 and 2000, he claims that his hedge fund only generated one year of negative returns in 1998 as compared to the S&P 500 Index rise of 29% during the same period. In the following years, his hedge fund generated 47% and 28%. Cramer claims that his hedge fund posted an average return of 24% from 1987 to 2001, and he took home at least $10 million. In 2001, he stepped aside from managing the fund and became a part of CNBC.
Before making numerous appearances as a guest commentator on CNBC in the late 1990s, Cramer started his TV career as a co-host on Kudlow & Cramer with Larry Kudlow between 2002 and 2005. In 2005, he started the phenomenon called Mad Money with Jim Cramer with the intent of educating retail investors and helping them make better-investing decisions. To ensure transparency, Cramer is required to disclose any holdings on the stocks that he discusses in his show, and he cannot trade that particular stock for five days after discussing it on his show. Some of the popular stocks on Jim Cramer’s watchlist include The Procter & Gamble Company (NYSE:PG), The Coca-Cola Company (NYSE:KO), and Cloudflare, Inc. (NYSE:NET).
In this article, we take a look at the 10 stocks that Cramer has given a Buy rating or bullish comments on in the past month. We have also discussed the growth catalysts and hedge fund sentiment for each stock. The hedge fund data is based on the 912 hedge funds tracked by Insider Monkey at the end of Q1 2022.
Jim Cramer Loves These 10 Stocks
10. Excelerate Energy, Inc. (NYSE:EE)
Excelerate Energy, Inc. (NYSE:EE) is a Texas-based liquefied natural gas (LNG) solutions provider that went public in April 2022. The significance of Excelerate Energy, Inc. (NYSE:EE) has increased following the start of the conflict between Russia and Ukraine in late February.
Europe is looking for energy security and shifting its focus from Russian natural gas to the more flexible and premium LNG market. Excelerate Energy, Inc. (NYSE:EE) has ten Floating Storage Regasification Units (FSRUs). Around fifty such units exist globally. On May 20, Finland signed a 10-year agreement with Excelerate Energy, Inc. (NYSE:EE) to charter an FSRU that will provide LNG to the Baltic Sea region. A day later, Russia announced that it will stop gas supplies to Finland following a payment dispute. The stock was given a Buy rating by Mr. Cramer on April 22, and he further added that the stock is a cheaper option than Cheniere Energy, Inc. (NYSE:LNG) with a reasonable valuation.
9. Signet Jewelers Limited (NYSE:SIG)
Number of Hedge Fund Holders: 27
Total Value of Hedge Funds’ Holding: $909,938,000
Signet Jewelers Limited (NYSE:SIG) is a Hamilton, Bermuda-based operator of 2,800 jewelry stores globally.
The biggest diamond retailer in the world was given a Buy rating by Jim Cramer during the lightning round bell on May 20. The share price of Signet Jewelers Limited (NYSE:SIG) has taken a dip of more than 45% since its November 2021 high of $111, but the slide in stock is due to broad macroeconomic uncertainty. Despite the uncertain macroeconomic outlook, Signet Jewelers Limited (NYSE:SIG) is in a strong position to deliver on its guidance of growing its market share from 9.3% in FY22 to 10% in FY23. Signet Jewelers Limited (NYSE:SIG) also intends to maintain double-digit operating margins and healthy returns to shareholders.
“We also saw Signet Jewelers (SIG) start to deliver improved performance during the quarter and believe their initiatives on closing unprofitable stores, expanding new Omni-channel capabilities, and launching new product offerings should begin to drive an improvement in their operations over the coming quarters. Historically, Signet’s stock price has performed very well coming out of an economic downturn. With the company valuation multiples near 2009 lows, it wouldn’t take much to see Signet’s share price double during the ongoing economic recovery. While we are highlighting the consumer space, we also wanted to mention a new investment, Chicos FAS, Inc. (CHS). The investment opportunity reminds us a lot of Bed Bath and GameStop earlier this year: a new CEO who is executing well on a new transformation plan, closing unprofitable stores, significantly streamlining and realigning their operations, and enhancing new product for their Chicos, White House Black Market, and Soma brands. Chicos has an asset-rich balance sheet, nearly $1.4B in total assets. The company’s real estate assets (land and buildings) combined with the cash on the balance sheet are significantly higher than the company’s current equity market capitalization! Over the next couple of years, the company has the potential to return to a $2B+ revenue base, which would support $100M in free cash flow. We believe a successful turnaround over the next couple of years has the potential to drive the share price 5-10x higher than current levels.”
Of the 912 hedge funds being tracked by Insider Monkey, 27 funds held a stake in Signet Jewelers Limited (NYSE:SIG) at the end of Q1 2022.
8. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 99
Total Value of Hedge Funds’ Holding: $45,438,795,000
Bank of America Corporation (NYSE:BAC) is a North Carolina-based diversified financial services company that is involved in commercial and investment banking.
During the lightning round segment on “Mad Money,” Cramer expressed confidence in the stock and termed it cheap. The Bank of America Corporation (NYSE:BAC) is the second biggest holding of Warren Buffett’s Berkshire Hathaway Inc (NYSE:BRK-A) as of March 31. The stock can be a big beneficiary of the expected increase in interest rates by the Federal Reserve to combat inflation. During Q1 2022, Bank of America Corporation (NYSE:BAC) reported an increase in net interest income by 13% YoY. The Wealth Management business of Bank of America Corporation (NYSE:BAC) is also in a stellar position with over $4 trillion in assets; it also observed an inflow of $160 billion from clients during Q1 2022.
“We first invested in Bank of America during the second quarter of 2013. During our near decade as investors, Bank of America closed the chapter on the legacy issues from acquired Countrywide, including mortgage write-downs and substantial legal charges. In addition, it successfully turned the Merrill Lynch franchise into one of the leading U.S. brokerage and advisory firms. Thanks to what we consider to be a strong management team led by CEO Brian Moynihan, the bank went through years of simplification, improved its cost structure and efficiency ratio, and reduced risk. While we believe Bank of America remains a much-improved market leader, we decided to exit our position and use the proceeds to invest in Brookfield Asset Management.”
As of Q1 2022, 99 hedge funds held a stake in the Bank of America Corporation (NYSE:BAC).
7. The TJX Companies, Inc. (NYSE:TJX)
Number of Hedge Fund Holders: 55
Total Value of Hedge Funds’ Holding: $1,940,549,000
The TJX Companies, Inc. (NYSE:TJX) is a Massachusetts-based apparel and home fashions discount retailer. The stock was given a Buy rating by Cramer on May 21.
Cramer thinks that the operator of TJ Maxx and Marshalls operates on the weakness of other retailers. He added that The TJX Companies, Inc. (NYSE:TJX) was unable to get excess inventory from other retailers in the past quarters because there was no additional inventory available. However, the issue of excess inventory is creeping up for big-box retailers, and this is where TJX excels in getting a suitable product. The TJX Companies, Inc. (NYSE:TJX) was one of the few retailers that were able to surpass earnings estimates for Q1 2022, despite coming up light on the top line.
“The pandemic created opportunities for us to be more aggressive in a variety of areas of the market. We were opportunistic throughout the year, for example, in positioning the portfolio to benefit from a flush consumer eager to return to spending and traveling. New positions included TJX, an off-brand retailer with a large presence in the U.S. and Europe that should continue to benefit from the contraction of many traditional retailers, particularly as consumer spending resumes.”
Out of the 912 hedge funds tracked by Insider Monkey at the end of Q1 2022, 55 funds held a stake in The TJX Companies, Inc. (NYSE:TJX).
6. Foot Locker, Inc. (NYSE:FL)
Number of Hedge Fund Holders: 21
Total Value of Hedge Funds’ Holding: $177,096,000
Foot Locker, Inc. (NYSE:FL) is a New York-based footwear and sportswear brand that was termed “alright for a trade” by Jim Cramer. He highlighted the stock as one of the three smaller players that he favors in the retail sector. Foot Locker, Inc. (NYSE:FL) provides an attractive annual dividend yield of around 5% and a strong share buyback program. The company declared a quarterly dividend of 40 cents, which reflects that the dividend has recovered to the pre-pandemic level.
In 2021, the company bought back $348 million worth of shares, and this year Foot Locker, Inc. (NYSE:FL) has an authorized share repurchase program of $1.2 billion in place. For a company that has a market capitalization of just over $3.2 billion, this is a significant number.
“Finally, Foot Locker (NYSE:FL) came under significant pressure during the quarter, with the stock down more than 50% from its highs and valuation not far from early 2020 lows. Nike continues to place a greater focus on their Direct-to-Consumer business, which will decrease their contribution to Foot Locker’s total sales, retreating to historical averages of 50% by 2023. While a near-term headwind to sales, management plans to offset the lost business by expanding distribution to other leading brands, rolling out larger neighborhood free-standing stores, and expanding two new growth banners (WSS & Atmos). WSS stores will provide an off-mall presence and focus on the rapidly growing and underserved Hispanic market. Atmos will provide Foot Locker with the ability to expand into Japan and Asia sneaker market with their digitally led business model. These new growth concepts have a combined potential to add more than $1B in sales by 2024. The company’s balance sheet remains very strong with $800M in cash and management is increasing returns to shareholders through raising the dividend by 40% and announcing a $1.2B share buyback (more than 40% of the float at current share prices). With the next 12 to 18 months as a transition period for the company, the share price weakness provides attractive reward/risk investment potential, near 3x Enterprise Value/Earnings Before Income, Taxes, Depreciation, and Amortization (EV/EBITDA) and close to a 30% normalized free cash flow yield.”
Overall, 21 hedge funds held a stake in Foot Locker (NYSE:FL) as of Q1 2022.
Apart from Foot Locker, Inc. (NYSE:FL), The Procter & Gamble Company (NYSE:PG), The Coca-Cola Company (NYSE:KO), and Cloudflare, Inc. (NYSE:NET) are some of the other stocks approved by Jim Cramer.
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Disclose. None. Jim Cramer Loves These 10 Stocks is originally published on Insider Monkey.