In this article, we discuss the 5 Jim Cramer stock picks this week. If you want to read about some more Jim Cramer stock picks, go directly to 10 Jim Cramer Stock Picks This Week.
5. The TJX Companies, Inc. (NYSE:TJX)
Number of Hedge Fund Holders: 55
The TJX Companies, Inc. (NYSE:TJX) operates as an off-price apparel and home fashion retailer. On December 20, during his Mad Money show on CNBC, Jim Cramer outlined his bullish position on the retailer, noting that while retail is truly awful right now, it is not uniformly awful and most stores may be struggling, but there were a few that are doing quite well. He added that The TJX Companies, Inc. (NYSE:TJX) stock was definitely a buy.
On December 6, Cowen analyst John Kernan maintained an Outperform rating on The TJX Companies, Inc. (NYSE:TJX) stock and raised the price target to $85 from $84, noting that the company’s opportunities across apparel, footwear, accessories, home, beauty, and kids are improving.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm BlueSpruce Investments is a leading shareholder in The TJX Companies, Inc. (NYSE:TJX) with 5.4 million shares worth more than $332.3 million.
In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and The TJX Companies, Inc. (NYSE:TJX) was one of them. Here is what the fund said:
“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 The TJX Companies, Inc. (NYSE: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.”
4. Morgan Stanley (NYSE:MS)
Number of Hedge Fund Holders: 52
Morgan Stanley (NYSE:MS) is a financial holding company that provides various financial products and services to corporations, governments, financial institutions, and individuals in the Americas, Europe, the Middle East, Africa, and Asia. On December 20, Jim Cramer said during his Mad Money show on CNBC that he liked Morgan Stanley stock heading into 2023 because higher rates are huge for their bottom line.
On December 20, Citi analyst Keith Horowitz maintained a Buy rating on Morgan Stanley (NYSE:MS) stock and raised the price target to $100 from $90, noting that the company’s market valuations and trading outlook were updated.
At the end of the third quarter of 2022, 52 hedge funds in the database of Insider Monkey held stakes worth $3.3 billion in Morgan Stanley (NYSE:MS), compared to 58 in the preceding quarter worth $2.99 billion.
In its Q3 2022 investor letter, Madison Funds, an asset management firm, highlighted a few stocks and The Morgan Stanley (NYSE:MS) was one of them. Here is what the fund said:
“This quarter we are highlighting Morgan Stanley (NYSE:MS) as a relative yield example in the Financial sector. MS is a leading investment bank and wealth management firm with approximately $5 trillion of client assets under management. It merged Citigroup’s Smith Barney business into its own wealth management business after the 2008 recession/financial crisis, which resulted in a more stable business model. Recent acquisitions of asset manager Eaton Vance and E-Trade provide additional stability and higher returns on capital. We believe MS has a sustainable competitive advantage due to its size and scale, global reach, strong reputation, and financial distribution capabilities. Importantly for a financial institution, it is in good financial health as key leverage ratios including common equity Tier 1 ratio, Tier 1 capital ratio, Tier 1 leverage ratio, and supplementary leverage ratio were all well above required minimums at the end of 2021.
Our thesis on MS is that its wealth management business will continue to become a larger part of the overall company, which will increase overall margins and return on equity (ROE). Wealth management and asset management are less cyclical than investment banking, and often generate higher margins and provide better stability of financial results. For example, the addition of Smith Barney added significant scale and boosted wealth management operating margins from below 10% into the mid-20%s over the past several years while also increasing returns on equity. Looking ahead, we believe the company will benefit from rising asset prices and higher interest rates, should they happen over time…read more
3. S&P Global Inc. (NYSE:SPGI)
Number of Hedge Fund Holders: 90
S&P Global Inc. (NYSE:SPGI) provides credit ratings, benchmarks, analytics, and workflow solutions in the global capital, commodity, and automotive markets. On December 20, Jim Cramer said in his Mad Money show, which was aired on CNBC, that banks were all in the negative territory for the year, down more than 27%. He added that they should have done much better, singling out S&P Global as one of those that had done better heading into 2023.
On December 2, Morgan Stanley analyst Toni Kaplan maintained an Overweight rating on S&P Global Inc. (NYSE:SPGI) stock and raised the price target to $390 from $378 post the investor’s day meeting where management introduced 2023 and 2025-2026 financial targets.
Among the hedge funds being tracked by Insider Monkey, London-based firm TCI Fund Management is a leading shareholder in S&P Global Inc. (NYSE:SPGI) with 8.8 million shares worth more than $2.7 billion.
In its Q3 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and S&P Global Inc. (NYSE:SPGI) was one of them. Here is what the fund said:
“Shares of rating agency and data provider S&P Global Inc. (NYSE:SPGI) fell 9% during the third quarter due to continued weak debt issuance activity and headwinds to the Indices business from equity market declines. Credit markets were exceptionally soft during the quarter with non-financial corporate bond issuance down 36% for investment grade and down 84% for high yield, reflecting greater investor risk aversion, rising interest rates, and a drop-off in M&A activity. We believe this ratings weakness is temporary and diversification benefits from the acquisition of IHS Markit should support earnings growth next year. Over the long term, the company should continue benefiting from the secular trends of increasing bond issuance, growth in passive investing, and demand for data and analytics, while enjoying meaningful and durable competitive advantages that, in our view, are only strengthening following the merger with IHS Markit.”
2. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 90
Wells Fargo & Company (NYSE:WFC) provides banking, investment, mortgage, and consumer and commercial finance products and services in the United States and internationally. On December 20, Jim Cramer said during his Mad Money show that banks, including Wells Fargo, could be tremendous performers if the Fed stopped bringing the pain at some point in 2023. Cramer also called the stock a great turnaround story for 2022.
On December 21, Citi analyst Keith Horowitz maintained a Buy rating on Wells Fargo & Company (NYSE:WFC) stock and lowered the price target to $48 from $50, noting that the company’s settlement with the consumer financial protection bureau is said to be a costly step forward.
At the end of the third quarter of 2022, 90 hedge funds in the database of Insider Monkey held stakes worth $6.2 billion in Wells Fargo & Company (NYSE:WFC), compared to 84 in the preceding quarter worth $7.2 billion.
In its Q3 2022 investor letter, Oakmark Funds, an asset management firm, highlighted a few stocks and Wells Fargo & Company (NYSE:WFC) was one of them. Here is what the fund said:
“Wells Fargo & Company (NYSE:WFC) has been a long-time holding in the Oakmark Fund. Despite the positives of higher interest rates and the company making good progress on reducing expenses and regulatory consent orders, Wells Fargo shares have fallen one-third from their highs earlier this year to roughly 6.5x our estimate of normalized earnings power, and the stock ended the quarter at ~1x next year’s tangible book value. We find this is far too cheap for a strong banking franchise capable of tangible returns in the low-to-mid teens across business cycles.”
1. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 110
UnitedHealth Global Incorporated (NYSE:UNH) operates as a diversified health care company in the United States. On December 20, Jim Cramer said that the firm was a best-of-breed healthcare stock, a boring, consistent operator with consistent results, nice dividends and reasonable value.
On December 7, Credit Suisse analyst A.J. Rice maintained an Outperform on UnitedHealth Group Incorporated (NYSE:UNH) stock and raised the price target to $610 from $590, noting that the valuation is rolled forward to 2024 without any changes.
Among the hedge funds being tracked by Insider Monkey, Fort Lauderdale, Florida-based investment firm GQG Partners is a leading shareholder in UnitedHealth Global Incorporated (NYSE:UNH) with 3.2 million shares worth more than $1.6 billion.
In its Q3 2022 investor letter, Stewart Asset Management, an asset management firm, highlighted a few stocks and UnitedHealth Global Incorporated (NYSE:UNH) was one of them. Here is what the fund said:
“Looking at the Great Recession which began at year-end 2007 and lasted to mid-year 2009 is helpful too. Our four largest current holdings in the portfolio weathered that period well. UnitedHealth’s (NYSE:UNH) earnings were resilient. While it reported modestly down earnings in 2008, its earnings rebounded quickly to record highs in 2010 and the shares responded strongly in anticipation of this.”
You can also take a peek at 12 Countries That Produce The Best Cosmetics and Top 15 3D Companies in the World.
