5 Stocks “About To Pop” According To Jim Cramer: In Retrospect

In this article we will discuss the 5 stocks Jim Cramer recommended back in October 2022, and how they have performed since then. If you want to explore similar stocks, you can go to 14 Stocks “About To Pop” According To Jim Cramer: In Retrospect.

5. Accenture Plc (NYSE:ACN)

Number of Hedge Fund Holders: 63

6-Month Performance as of March 30 (Relative to SPY): -3.41%

Accenture Plc (NYSE:ACN) is the “gold standard for consulting” for tech companies. He mentioned the stock among his tech stock picks that were “about to pop” back in October. As of March 30, Accenture Plc (NYSE:ACN) has underperformed the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) by 3.41%, over the past 6 months.

At the end of the fourth quarter of 2022, 63 hedge funds were long Accenture Plc (NYSE:ACN) and disclosed positions worth $2.89 billion. Of those, GuardCap Asset Management was the largest investor in the company and held a stake worth $386.9 million.

ClearBridge Investments made the following comment about Accenture plc (NYSE:ACN) in its Q4 2022 investor letter:

“Accenture plc (NYSE:ACN) is a leading global professional services company that helps clients build their digital infrastructure and optimize their operations. We view Accenture as a resilient, high-quality business with consistent earnings and cash flow, a strong balance sheet and very attractive returns on capital. Secular drivers like cloud migration and digital transformation, as well as new, innovative technology deployments like data security, block chain, AI and machine learning position Accenture well for continued growth. It is also currently rolling out a suite of sustainability tools that offers a comprehensive view of a company’s goals, progress and performance across financial and ESG measures, so it is an enabler of ESG for its clients. We exited our position in software-as-a-service company Workday to fund the position, largely on better relative risk/reward, in our view.”

4. S&P Global Inc. (NYSE:SPGI)

Number of Hedge Fund Holders: 97

6-Month Performance as of March 30 (Relative to SPY): -1.71%

Cramer also mentioned S&P Global Inc. (NYSE:SPGI) among his top stocks that were “about to pop”. He said that while IPOs are mute at the moment, it is not the “new normal” and investors should by S&P Global Inc. (NYSE:SPGI) on the dip. S&P Global Inc. (NYSE:SPGI) has underperformed the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) by 1.71% over the past 6 months, as of March 30.

97 hedge funds disclosed having stakes in S&P Global Inc. (NYSE:SPGI) at the end of Q4 2022. The total value of these stakes amounted to $7.88 billion, up from $6.24 billion in the previous quarter with 90 positions. The hedge fund sentiment for the stock is positive.

As of December 31, TCI Fund Management is the largest shareholder in S&P Global Inc. (NYSE:SPGI) and has a stake worth $3 billion.

Baron Funds made the following comment about S&P Global Inc. (NYSE:SPGI) in its Q4 2022 investor letter:

“Shares of rating agency and data provider S&P Global Inc. (NYSE:SPGI) increased 10.1% during the quarter as investors looked past weak debt issuance activity and anticipated a potential issuance rebound in 2023. Equity markets rose during the quarter, offering some reprieve to asset-based revenue headwinds. The company also hosted an Investor Day during which management provided medium-term financial guidance of 7% to 9% annual revenue growth and low to mid-teens annual EPS growth. We continue to own the stock due to the company’s durable growth characteristics that are underpinned by the secular trends of increasing bond issuance, growth in passive investing, and demand for data and analytics, while also benefiting from significant competitive advantages.”

3. ServiceNow, Inc. (NYSE:NOW)

Number of Hedge Fund Holders: 97

6-Month Performance as of March 30 (Relative to SPY): 2.11%

One of Cramer’s favorite stocks from the software space was ServiceNow, Inc. (NYSE:NOW). Cramer did not think that the company’s CEO would “let this stock continue to roll over and play dead”. ServiceNow, Inc. (NYSE:NOW) has outperformed the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) by 2.11% over the past 6 months, as of March 30.

At the end of Q4 2022, ServiceNow, Inc. (NYSE:NOW) was spotted on 97 investors’ portfolios that held collective stakes worth $3.85 billion in the company. Of those, SCGE Management was the most prominent investor in the company and held a position worth $363 million.

Here is what Polen Capital had to say about ServiceNow, Inc. (NYSE:NOW) in its Q4 2022 investor letter:

“ServiceNow, Inc. (NYSE:NOW) is an $80 billion market cap business based in California. Its purpose is to make the world of work, work better for people. Getting a job done in an enterprise (what the company refers to as “workflow”) usually requires different people in various functions of an organization to work together. Often, they rely on different technology systems and inefficient manual processes to complete each step of the job before moving on to the next.

ServiceNow believes the most effective digital transformation initiative utilizes tools that can integrate workflows across siloed systems, departments, processes, and people. The company is solving what is arguably the biggest pain point in the biggest profit pool in the world (enterprises). Consider the explosion in data growth and all the software point solutions emerging constantly. ServiceNow wrangles all this into a fully integrated dashboard on a global scale with global customers in every industry. Nearly 100% of revenues are subscription based with a 99% renewal rate, and the company currently has no direct competition, according to our research. ServiceNow started with IT workflow, and today, ~40% of net new annual contract value is in non-IT workflows. Through constant innovation, the business has continued to expand its total addressable market, and we think it can grow free cash flow (FCF) at a 20%+ annualized rate for the next three to five years. At less than 30x FCF, we thought the valuation was attractive.”

2. Yum! Brands, Inc. (NYSE:YUM)

Number of Hedge Fund Holders: 48

6-Month Performance as of March 30 (Relative to SPY): 8.41%

Another one of Cramer’s top restaurant stocks that were “about to pop” was Yum! Brands, Inc. (NYSE:YUM). He said that the company is well-run and is handling food inflation and wage pressures effectively. As of March 30, the stock has outperformed the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) by 8.41% over the past 6 months.

At the end of Q4 2022, 48 hedge funds were long Yum! Brands, Inc. (NYSE:YUM) and disclosed collective positions of $2.31 billion in the company. Of those, Citadel Investment Group was the top investor in the company and disclosed a position worth $404.9 million.

1. JPMorgan Chase & Co. (NYSE:JPM)

Number of Hedge Fund Holders: 100

6-Month Performance as of March 30 (Relative to SPY): 9.39%

Cramer mentioned JPMorgan Chase & Co. (NYSE:JPM) among his top picks from the banking sector and particularly liked the company’s financial condition at the time. According to Cramer JPMorgan Chase & Co. (NYSE:JPM) was “about to pop” and, as of March 30, the stock has outperformed the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) by 9.39% over the past 6 months.

JPMorgan Chase & Co. (NYSE:JPM) was held by 100 hedge funds at the end of Q4 2022. These funds held positions worth $5.17 billion in the company. As of December 31, Greenhaven Associates is the largest stockholder in the company and has a stake worth $643 million.

Here is what Vltava Fund had to say about JPMorgan Chase & Co. (NYSE:JPM) in its third-quarter 2022 investor letter:

“We regard JPM to be the strongest and best- managed bank in the world. It is a leader in investment banking, commercial banking, credit cards, and asset management. Its size (the largest bank in the USA, with nearly USD 4,000 billion in assets) and diversification give it a strong competitive advantage that is compounded by its cost advantages and the high costs to clients associated with switching banks. JPM’s management prides itself on running the only large bank to avoid major instability over the long term.

JP Morgan’s quality and strength first became fully evident in 2008 under the leadership of its CEO Jamie Dimon. Not only did JP Morgan help to stabilize the market by taking over the failing Bear Stearns in the spring of that year, but throughout the Great Financial Crisis it was the only big US bank that did not require government assistance and it was highly profitable even in the difficult year of 2008.

A well-functioning and efficient bank can be a very good long-term investment, because the interest compounding effect works well here. JPM’s return on equity (ROE) is well into the double digits and this puts it in a good position to continue producing better long-term returns than does the market. JPM has been very profitable even during years when interest rates were close to zero. The current – and perhaps not temporary – return to somewhat more normal, higher interest rates should have a significantly positive impact on the bank’s interest income and overall profitability.”

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