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Monday, August 1, 2011

Jim Cramer's best Favorite Stocks

Jim Cramer is the host of CNBC's Mad Money show and the chairman of In 1987, Cramer started his own hedge fund and returned an average of 24% per year between 1987 and 2001. Cramer also authored six money management books.

During the last 30 days, his favorite buy recommendations (based on number of mentioned days) on Mad Money were as follows:

Company No. Of Times Picked First Date* Return** Excess Return (wrt S&P500)
Apple (AAPL) 7 2-Aug-10 49.9% 26.9%
Google (GOOG) 4 1-Jun-11 15.5% 16.1%
Netflix (NFLX) 4 14-Mar-11 32.7% 30.9% (AMZN) 3 4-Aug-10 74.4% 47.9%
Caterpillar (CAT) 3 10-Aug-10 44.5% 21.9%
Chesapeake Energy (CHK) 3 6-Jan-11 25.9% 21.7%
Chipotle Mexican Gr (CMG) 3 29-Apr-11 21.0% 25.8%
Cummins (CMI) 3 28-Jul-10 40.5% 16.8%
ConocoPhillips (COP) 3 5-Aug-10 31.4% 11.3%
Consolidated Edison (ED) 3 11-Aug-10 17.1% -3.9%
SPDR Gold Shares (GLD) 3 7-Sep-10 28.1% 5.4%
Intl Business Mach (IBM) 3 5-Oct-10 33.4% 16.9%
McDonald's (MCD) 3 17-Mar-11 19.5% 15.9%
Annaly Capital (NLY) 3 5-Aug-10 16.3% -1.5%
VF Corp (VFC) 3 15-Nov-10 47.2% 33.4%
Average 33.2% 19.0%

*Represents latest recommendation change from sell to buy. The study interval includes only past one year.

**Includes the duration from first date till July 27.

Cramer's favorite stock recommendations returned 33.2% on average since they have been recommended. The average relative performance of these stocks against the S&P 500 is 19%. 13 out of 15 of his favorite stocks have managed to beat the market.

Cramer's most favorite stock during last 30 days was Apple. He repeated his buy recommendation of AAPL seven times during the last 30 days. AAPL has a market cap of $364.3 billion and P/E ratio of 15.5. AAPL recently traded at $392.59 and has gained 49.9% since August 2, 2010, beating the SPY by 26.9 percentage points. Rob Citrone’s Discovery Capital Management had $633 million invested in AAPL at the end of March. (See Citrone’s top holding here.)

Cramer repeated his buy recommendation of GOOG four times during the last 30 days. GOOG has a market cap of $196.8 billion and P/E ratio of 23.7. GOOG recently traded at $607.22 and has gained 15.5% since June 1, beating the SPY by 16.1 percentage points.

On July 25, Cramer said the following about Google:

In the changing landscape of tech, right now, repeat after me: Social media, mobile, the cloud .... You've got to have all three. That's what Wall Street wants to see. Google has all three, which is why it's worth buying even up here, as it goes higher.

Chesapeake Energy Corporation produces natural gas in the United States. Cramer repeated his buy recommendation of CHK three times during last 30 days. CHK has gained 25.9% since Jan 06, 2011, beating the SPY by 21.7 percentage points. CHK has a market cap of $21.3 billion, P/E ratio of 28.4 and dividend yield of 1%. Chesapeake is also one of the 11 energy companies hedge funds are buying like crazy. Twelve hedge funds had CHK among their top 10 holdings. Hedge funds collectively own 5% of CHK’s outstanding shares. Mason Hawkins’ Southeastern Asset Management and Robert Pohly’s Samlyn Capital had large CHK holdings at the end of March.

On July 26 Cramer said the following about Chesapeake Energy:

If you want "steady as she goes," I want you to buy CHK ... buy, buy, buy ... which has been creeping up nicely, even though it doesn't get the credit it deserves.

Netflix has gained 32.7% since March 14, beating the SPY by 30.9 percentage points. Leonard Brecken predicted that Netflix (NFLX) is going to fall 70% within 12 months. He was on CNBC’s Fast Money and told viewers that Netflix is playing accounting games and that content costs are skyrocketing. Blue Ridge Capital’s John Griffin had $125 million invested in Netflix shares at the end of 2010.

CMG has a market cap of $10.1 billion and P/E ratio of 55. CMG recently traded at $325.2 and has gained 21% since April 29, beating the SPY by 25.8 percentage points. CMG plans to open 135 to 145 new restaurants in 2011, bringing the total restaurant count to roughly 1,220. CMG’s revenue for the first quarter was $509.4 million, up 24.3% from the prior year period. Net income for the first quarter of 2011 was $46.4 million, compared to $37.8 million in the first quarter of 2010. Mark Broach’s Manatuck Hill Partners and Jim Simons’ Renaissance Technologies had the largest positions in CMG. Manatuck Hill Partners was the second best performing hedge fund during second quarter. by Insder Monkey
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