In this article, we will look at 2 stocks that Jim Cramer is recommending for a “mild” recession. If you want to explore similar stocks, you can also read 4 Jim Cramer Stocks for ‘Mild’ Recession.
2. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 113
Jim Cramer thinks The Walt Disney Company (NYSE:DIS) is a good fit for a mild recession and noted that the company’s theme park business will remain resilient in an economic downturn. Wall Street is also bullish on The Walt Disney Company (NYSE:DIS). Over the past 3 months, the stock has received 17 Buy ratings and 8 Hold ratings and has a consensus Buy rating from Wall Street analysts. The stock’s average price target of $136 implies a 26% upside from its closing price on August 4 which sits at $108.12.
This July, Goldman Sachs analyst Brett Feldman revised his price target on The Walt Disney Company (NYSE:DIS) to $130 from $148 and reiterated a Buy rating on the shares. On July 31, Truist analyst Matthew Thornton adjusted his price target on The Walt Disney Company (NYSE:DIS) to $125 from $135 and maintained a Buy rating on the shares. The analyst sees the company’s theme parks business recovering to higher revenue and profitability from increased direct-to-consumer content spending.
As of June 30, Yacktman Asset Management owns more than 1.66 million shares of The Walt Disney Company (NYSE:DIS) and is the largest shareholder in the company. The fund’s stakes are valued at $157.39 million and the investment covers 1.63% of its 13F portfolio.
Hedge funds are initiating positions in The Walt Disney Company (NYSE:DIS). At the end of the first quarter of 2022, 113 hedge funds disclosed ownership of stakes in The Walt Disney Company (NYSE:DIS). The total value of these stakes came in at $5.16 billion. This is compared to 111 positions in the preceding quarter with stakes worth $6.94 billion.
Oakmark Funds, an investment management firm, mentioned The Walt Disney Company (NYSE:DIS) in its “Oakmark Fund” second-quarter 2022 investor letter. Here is what the firm had to say:
“Disney (NYSE:DIS) is one of the most beloved consumer companies in the world. Its media business has a rich library of intellectual property, which provides a powerful engine for creating new content across the Disney, Pixar, Marvel, and Star Wars brands. This content also contributes to the success of Disney’s theme parks, which generated nearly half the company’s earnings and grew more than 10% annually in the decade prior to the pandemic. Shares have fallen nearly 50% over the past year as investors worried about the company’s ability to transition its media business to a direct-to-consumer streaming world. This transition has required management to make investments in its Disney+ streaming service that are depressing profitability today. However, we believe these investments will ultimately produce attractive returns as Disney+ continues to grow subscribers and increase pricing over time. As a result, we were able to purchase shares at a substantial discount to our estimate of intrinsic value.”
1. Amazon.com Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 271
Jim Cramer likes Amazon.com Inc. (NASDAQ:AMZN) because of the company’s healthcare business, strong position in advertising, and Amazon Web Services, the company’s cloud business. Jim Cramer is recommending Amazon.com Inc. (NASDAQ:AMZN) for a mild recession and believes it is one of the few retailers that can navigate a mild recession.
On July 28, Amazon.com, Inc. (NASDAQ:AMZN) reported that its revenue for the fiscal second quarter of 2022 amounted to $121.23 billion, up 7.21% year over year, and ahead of market consensus by $2.09 billion. Amazon Web Services accounted for $19.74 billion of the company’s Q2 2022 revenue, up 33% year over year from $14.8 billion. Along with its earnings release, Amazon.com Inc. (NASDAQ:AMZN) announced that it expects its revenue for the fiscal third quarter of 2022 to grow by up to 17% year over year and amount to $130 billion.
Wall Street is bullish on Amazon.com Inc. (NASDAQ:AMZN). On July 29, Deutsche Bank analyst Lee Horowitz raised his price target on Amazon.com Inc. (NASDAQ:AMZN) to $175 from $155 and reiterated a Buy rating on the shares. Shortly after the company’s earnings release, Jefferies analyst Brent Thill raised his price target on Amazon.com Inc. (NASDAQ:AMZN) to $165 from $150 and maintained a Buy rating on the shares.
At the end of Q1 2022, 271 hedge funds were long Amazon.com Inc. (NASDAQ:AMZN). These funds held stakes worth $48.02 billion in the company. This is compared to 279 hedge funds in Q4 2021 with stakes worth $49.16 billion.
In the second quarter of 2022, Intermede Investment Partners raised its stakes in Amazon.com Inc. (NASDAQ:AMZN) by 2454%, bringing them to $167.29 million. As of June 30, Intermede Investment Partners owns roughly 1.5 million shares of Amazon.com Inc. (NASDAQ:AMZN) and is the largest shareholder in the company.
Here is what Oakmark Funds had to say about Amazon.com, Inc. (NASDAQ:AMZN) in its “Oakmark Select Fund” second-quarter 2022 investor letter:
“Amazon (NASDAQ:AMZN) is the leading e-commerce and cloud-computing provider in the world. Two-thirds of U.S. households are Amazon Prime subscribers, and over half of all online product searches now start on Amazon. We believe the company’s strong customer loyalty and massive infrastructure are significant barriers to entry in a growing e-commerce market. Separately, Amazon Web Services (“AWS”) controls nearly half of the market in cloud computing. We believe AWS has become utility-like in nature and scale and we expect healthy growth moving forward as IT workloads continue moving to the cloud. More recently, concerns about rising investment spending have weighed on the stock-as they have in times past-providing us another opportunity to purchase shares at a very attractive price. At our purchase price and valuing AWS like its peers, an investor isn’t paying much of anything for the immensely valuable e-commerce franchise.”
You can also take a look at Jim Cramer Stock Portfolio: 10 Recent Additions and Jim Cramer Recommends These 10 Stocks For Recession.
