In this article, we will take a look at the 5 Mad Money stock picks this week. To see more such companies, go directly to 10 Mad Money Stock Picks This Week.
5. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 76
Jim Cramer gave positive comments about Eli Lilly and Company (NYSE:LLY) in a Lightning Round of his program earlier this month. Cramer said that he is going to buy some more of Eli Lilly and Company (NYSE:LLY) stock for his charitable trust.
Recently, the US FDA granted an additional indication for Eli Lilly and Company (NYSE:LLY) Verzenio (abemaciclib) in combination with endocrine therapy as an adjuvant treatment for HR+, HER2- node-positive, early breast cancer at high risk of occurrence.
At the end of the fourth quarter of 2022, 76 hedge funds out of the 943 funds reported owning stakes in Eli Lilly and Company (NYSE:LLY). The total value of these stakes was about $5.2 billion. The most notable stakeholder of Eli Lilly and Company (NYSE:LLY) was Rajiv Jain’s GQG Partners which owns a $603 million stake in the company.
Baron Funds made the following comment about Eli Lilly and Company (NYSE:LLY) in its Q4 2022 investor letter:
“Eli Lilly and Company (NYSE:LLY) is a large-cap pharmaceutical company. Shares increased on investor optimism about Lilly’s new product pipeline, which includes Mounjaro for diabetes and obesity and Donanemab for Alzheimer’s disease. We continue to think Lilly has a healthy base business with limited near-term patent expirations, a strong pipeline, and potential for significant margin expansion, which should translate to strong revenue and earnings growth over at least the next five years.”
4. Union Pacific Corporation (NYSE:UNP)
Number of Hedge Fund Holders: 83
Answering a question about Union Pacific Corporation (NYSE:UNP) in the backdrop of the CEO’s departure, Jim Cramer said that it is a “great long-term play.” Recently, Barclays analyst Brandon R. Oglenski said that the railroad sector is seeing a lot of negative sentiment amid derailments, labor and demand concerns.
However, the analyst said that the industry’s fundamentals could improve in 2023 and that would minimize the downside risks. The analyst reiterated an Overweight rating for several rail road stocks, including Union Pacific Corporation (NYSE:UNP).
As of the end of the fourth quarter of 2022, 83 hedge funds reported having stakes in Union Pacific Corporation (NYSE:UNP). The net worth of these stakes at the end of the quarter was about $5.4 billion. The biggest hedge fund stakeholder of Union Pacific Corporation (NYSE:UNP) was Eric W. Mandelblatt’s Soroban Capital Partners which owns a $964 million stake in the company.
Here is what Diamond Hill Capital Management specifically said about Union Pacific Corporation (NYSE:UNP) in its Q2 2022 investor letter:
“Union Pacific Corporation (NYSE:UNP) is a large railroad company that carries freight across the western US and between Canada and Mexico. It transports a variety of industrial goods, raw materials and containerized freight between major US ports, industrial hubs and international gateways. The goods that Union Pacific and other railroads transport are fundamental inputs in the economy and are resilient to long-term trends in the business cycle. We believe Union Pacific offers a compelling investment opportunity as its substantial infrastructure investments, relative cost advantages, limited leverage and the essential nature of the products it delivers provides the company with what we believe is one of the widest moats in the transportation sector. We also like that Union Pacific has a shareholder-oriented management team that is focused on growing earnings while returning capital to shareholders.”
3. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 84
Jim Cramer discussed several healthcare stocks in his recent program and said that the latest market rotation out of the healthcare sector had no justifiable reason. He said that he spent some time looking at why healthcare stocks like Johnson & Johnson (NYSE:JNJ) and Merck were down but he could not find any reason. Cramer said the only reason these stocks fell is because it was the end of the month and a lot of funds were unloading their “losers.”
Earlier this month, latest data showed Johnson & Johnson (NYSE:JNJ) treatment’s long-term durable efficacy and safety in Crohn’s disease.
Johnson & Johnson (NYSE:JNJ) has upped its dividend for six decades without a break. This makes Johnson & Johnson (NYSE:JNJ) one of the best for recession scenarios.
Johnson & Johnson (NYSE:JNJ) is also one of the most popular stocks owned by hedge funds as of the end of the last quarter of 2022. 84 out of the 943 funds tracked by Insider Monkey had stakes in Johnson & Johnson (NYSE:JNJ). The total value of these stakes was $5.6 billion.
2. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 91
On February 27, Jim Cramer said in a tweet, “This could be explosive! Buy Tesla.” He said this while retweeting an advert for Cathie Wood’s interview on “Squawk on the Street.” In January, Jim Cramer in a program noted Tesla, Inc. (NASDAQ:TSLA)’s strong earnings and credited them for the broader market’s gains.
On March 6, Tesla, Inc. (NASDAQ:TSLA) made headlines after it was reported that the company slashed prices for Model X and Model S.
At the end of the fourth quarter of 2022, 91 hedge funds had stakes in Tesla, Inc. (NASDAQ:TSLA). The total value of these stakes was about $5.9 billion.
Baron Partners Fund made the following comment about Tesla, Inc. (NASDAQ:TSLA) in its Q4 2022 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) declined 54% in the quarter and detracted 26.62% from the Fund’s overall performance. We initiated our position in Tesla in February 2014 at a split-adjusted price of $11.91. Over the subsequent two years, we acquired 16.65 million shares for an average split-adjusted price of $14.22. At the time of our final purchase in February 2016, the stock represented 9.6% of the Fund’s total investments.
Tesla produced approximately 35,000 vehicles in 2014, the year of our initial purchase. In 2022, it produced 1.37 million vehicles. Not only has its production grown tremendously, but it has also significantly increased profitability per vehicle. Tesla has expanded from producing high performance electric vehicles for wealthy aficionados to a company that produces affordable luxury cars for a sizable audience. In turn, it has transformed its industry. Investors rewarded this expansion in both production and profits, and the stock price increased to $265.25 at the end of the third quarter. Since 2016, we sold 4.5 million shares, or 27.0% of the original holding, at an average price of $218.39.
Investors have recently become concerned about many external factors. Elon Musk is Tesla’s founder and CEO. His purchase of Twitter has negatively impacted the perception of Tesla’s brand in the short term. China’s COVID policies and outbreak have paused purchases and production in the company’s largest region. Global recessionary fears and upcoming Inflation Reduction Act incentives also caused some to delay new vehicle purchases in various markets…” (Click here to read the full text)
1. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 194
Jim Cramer gave some bullish comments about Meta Platforms, Inc. (NASDAQ:META) recently. He said that Mark Zuckerberg is one of the most “determined” people out there and Meta Platforms, Inc. (NASDAQ:META) will be able to “make money” for the shareholders.
In late February, Bank of America analysts listed some top companies that stand to benefit from the latest AI boom. Meta Platforms, Inc. (NASDAQ:META) was in the list, as BofA highlighted the company’s LLaMA large language model announcement.
Meta Platforms, Inc. (NASDAQ:META) is one of the most popular tech stocks among the 943 elite hedge funds tracked by Insider Monkey. As of the end of the last quarter of 2022, 194 hedge funds had reported owning stakes in Meta Platforms, Inc. (NASDAQ:META), much higher than 177 funds at the end of the previous quarter. The biggest hedge fund stakeholder of Meta Platforms, Inc. (NASDAQ:META) was Boykin Curry’s Eagle Capital Management which owns a $1.1 billion stake in the company.
Baron Fifth Avenue Growth Fund made the following comment about Meta Platforms, Inc. (NASDAQ:META) in its Q4 2022 investor letter:
“We also added to Meta Platforms, Inc. (NASDAQ:META) in the fourth quarter. Foreign currency movements and the weakening macro environment have impacted Meta’s revenue growth rates in the near term (revenues declined 4% year[1]over-year in the most recently reported third quarter), while investors continue to be focused on the company’s growing expenses and capital expenditures, which create a double-whammy impact on margins and free[1]cash-flow. This hyper-focus on the near term (driving the stock down 25% the day after earnings) overlooks the company’s long-term prospects, in our view. First, Meta has 2.9 billion daily active users and is growing (it was up 4% year-over-year). Second, Meta is already seeing significant user engagement for its Reels product that competes with TikTok. Reels reached 140 billion daily views across Facebook and Instagram, a 50% increase over the last 6 months, and, as importantly, Reels engagement has been incremental to time spent on the platform. Third, Reels is rapidly scaling its monetization, hitting a $3 billion revenue run-rate during the third quarter, up from $1 billion in the second quarter, and, based on rumored numbers for TikTok in 2022, likely already has a 15% to 25% market share since its standing start in 2021. Fourth, while the company continues growing its expenses, we are encouraged by the recent cost cutting announcements and believe that continued investment in AI-infrastructure will pay off, as the company works to regain the lost signal from Apple’s IDFA and ATT changes. Lastly, the sell-off in the shares resulted in a deeply undervalued stock for those investors willing to look out a few years, with its next-12-months earnings yield climbing above 9% during the quarter. This yield also compares to about 6% for the S&P 500 Index.”
You can also take a peek at 15 Best Short-Term Stocks to Buy and 10 Best Stocks to Buy for High Returns.
