Jim Cramer’s Recession Portfolio: Top 5 Stock Picks

1. PepsiCo, Inc. (NYSE:PEP)

Number of Hedge Fund Holders: 62

From the consumer staples sector, Jim Cramer thinks PepsiCo, Inc. (NYSE:PEP) should be on investors’ radars if the U.S. goes into a severe recession. As of July 29, PepsiCo, Inc. (NYSE:PEP) has soared 11.47% over the past twelve months and is offering a forward dividend yield of 2.68%, which the company backs with trailing twelve-month free cash flows of $6.33 billion.

Wall Street is bullish on PepsiCo, Inc. (NYSE:PEP). On July 6, JPMorgan analyst Andrea Teixeira adjusted her price target on PepsiCo, Inc. (NYSE:PEP) to $185 from $186 and reiterated a buy-side Overweight rating on the shares. The analyst noted that the risk/reward for PepsiCo, Inc. (NYSE:PEP) is favorable at current valuation levels. On July 8, Morgan Stanley analyst Dara Mohsenian reiterated his Overweight rating and $198 price target on PepsiCo, Inc. (NYSE:PEP).

On July 12, PepsiCo, Inc. (NYSE:PEP) reported strong earnings for the fiscal second quarter of 2022. The company registered an EPS of $1.86 and outperformed Wall Street consensus by $0.12. Moreover, the company’s revenue for the quarter came in at $20.23 billion, up 5.25% year over year, and beat market expectations by $715.34 million

At the end of Q1 2022, 62 hedge funds disclosed ownership of stakes in PepsiCo, Inc. (NYSE:PEP). The total stakes of these hedge funds amounted to $4.86 billion, up from $4.64 billion in Q4 2021 with 60 positions. The hedge fund sentiment for the stock is positive.

In the second quarter of 2022, Bailard Inc raised its stakes in PepsiCo, Inc. (NYSE:PEP) by 6%, bringing them to $12.76 million. As of June 30, Bailard Inc is the top shareholder in the company.

Here is what ClearBridge Investments had to say about PepsiCo, Inc. (NASDAQ:PEP) in its Q4 2021 investor letter:

“The pandemic created opportunities for us to be more aggressive in a variety of areas of the market. We were opportunistic throughout the year. After a strong year for equities, we sought to bolster more defensive areas of the portfolio and added to PepsiCo, increasing our exposure to a high-quality and stable name.”

You can also take a look at 10 Stocks to Buy Before the Next Recession and The 9 China Rebound Stocks to Buy According to Jim Cramer.

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