In this article, we discuss the 10 stocks that Jim Cramer just turned bullish on.
There are few finance personalities on television that have garnered as much of a fan-following as Jim Cramer, the host of Mad Money on CNBC, and a former hedge fund manager who averaged returns of over 20% during his decade-long stint as a money manager. The volatile market dynamics of the past few months, that saw benchmark indexes like the S&P 500, the NASDAQ Composite, and the Dow Jones Industrial Average tumble by 15%, 23%, and 12% year-to-date, respectively, have left many investors reeling, and Cramer has a way out.
During a recent episode of his show, Cramer underlined how “rationality” seemed to be returning to the market as profitable firms saw their stocks rise higher as firms that were “losing money but had good sales data” fell down the pecking order. Cramer stressed that those investors who thought that “unprofitable growth stocks” were getting a reprieve during this time should put these “thoughts to rest”.
Although Cramer has been bullish on tech giants like Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Alphabet Inc. (NASDAQ:GOOG) for most of the past year, he has consistently advised investors to prefer value over growth until the market returns to normal. Cramer has noted that traditionally, institutional money managers, the gold standard for investors, “hate unprofitable firms” and the current situation had led them away from “fast growth” companies as well.
Our Methodology
These were picked keeping in mind the latest calls that Cramer made on these equities on his Mad Money show aired by news platform CNBC. An extensive database of around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2022 was used to identify the popularity of each stock among hedge funds.
Jim Cramer Just Turned Bullish on These Stocks
10. Montauk Renewables, Inc. (NASDAQ:MNTK)
Number of Hedge Fund Holders: 10
Montauk Renewables, Inc. (NASDAQ:MNTK) operates as a renewable energy company. During the Lighting Round of his show on August 31, Jim Cramer outlined his bullish stance on the company while answering a viewer question. Cramer said that the company was “a winner” and that he “liked it”.
Montauk Renewables, Inc. posted earnings for the second quarter of 2022 on August 9, reporting earnings per share of $0.13, beating market estimates by $0.02. The revenue over the period was $67 million, up 114% year-on-year.
At the end of the second quarter of 2022, 10 hedge funds in the database of Insider Monkey held stakes worth $10 million in Montauk Renewables, Inc., the same as in the previous quarter worth $11 million.
Just like Amazon.com, Inc., Apple Inc., and Alphabet Inc., Montauk Renewables, Inc. is one of the stocks that elite investors have on their radar.
9. ICL Group Ltd (NYSE:ICL)
Number of Hedge Fund Holders: 13
ICL Group Ltd (NYSE:ICL) is a specialty minerals and chemicals firm. The journalist investor was bullish on the firm during the Lightning Round of his show on September 1. Cramer, while responding to a viewer question, said that he was going “to go” with the opinion of the viewer that it was time to be bullish on the fertilizer industry with regards to phosphorus, not nitrogen. And ICL Group was one of the top stocks in this space, along with Deere.
In early June, Barclays analyst Benjamin Theurer initiated coverage of ICL Group Ltd stock with an Equal Weight rating and a price target of $12, predicting lasting supply and demand tightness beyond 2023 in the agriculture sector.
At the end of the second quarter of 2022, 13 hedge funds in the database of Insider Monkey held stakes worth $156 million in ICL Group Ltd, compared to 14 in the preceding quarter worth $137 million.
8. Chubb Limited (NYSE:CB)
Number of Hedge Fund Holders: 35
Chubb Limited (NYSE:CB) is a Switzerland-based insurance firm. In late August, the former hedge fund manager said that the firm was a “beneficiary of higher interest rates, which is noteworthy now that the Fed reinforced its hawkish posture”. He added that he thought the rates would rise once again and benefit Chubb even further in the coming months.
On July 12, Jefferies analyst Yaron Kinar maintained a Buy rating on Chubb Limited stock and lowered the price target to $244 from $247, noting that the macro economic slowdown had led to decreasing forward estimates for the firm.
At the end of the second quarter of 2022, 35 hedge funds in the database of Insider Monkey held stakes worth $1.6 billion in Chubb Limited, compared to 31 the preceding quarter worth $1.8 billion.
In its Q1 2022 investor letter, Aristotle Capital Management, an asset management firm, highlighted a few stocks and Chubb Limited was one of them. Here is what the fund said:
“Our investment in Chubb Limited began in the fourth quarter of 2015, shortly after ACE Limited announced it would acquire the Chubb Corporation, creating the largest global property and casualty insurance company by underwriting income. During our nearly seven-year holding period, the company’s combination progressed leading to the realization of main catalysts we had identified. These included cost savings, broadened product offerings and an expanded customer base, as well as enhanced distribution capabilities and improved pricing due to scale. In addition, Chubb Limited successfully grew its profitable high-net-worth personal lines. While we still consider Chubb to be a high-quality business, few catalysts remain after what was, in our opinion, a remarkable run of successful business execution. As such, we decided to step aside in favor of what we believe to be a more optimal investment in Blackstone.”
7. APA Corporation (NASDAQ:APA)
Number of Hedge Fund Holders: 36
APA Corporation (NASDAQ:APA) is an oil and gas exploration and production firm. During the Lightning Round of his show on August 31, the former Goldman Sachs bigwig underlined his bullish stance on the energy sector, saying that APA had a “lot of natural gas” and that he could not believe “that management has stuck it out”, wishing the firm further luck in the future.
On August 31, Barclays analyst Jeanine Wai maintained an Overweight rating on APA Corporation stock and lowered the price target to $53 from $55, noting that energy firms were maintaining top-tier free cash flow yields.
Among the hedge funds being tracked by Insider Monkey, Chicago-based firm Harris Associates is a leading shareholder in APA Corporation with 16.6 million shares worth more than $581 million.
At the end of the second quarter of 2022, 36 hedge funds in the database of Insider Monkey held stakes worth $745 million in APA Corporation, compared to 46 the preceding quarter worth $1.2 billion.
In its Q1 2022 investor letter, Oakmark Funds, an asset management firm, highlighted a few stocks and APA Corporation was one of them. Here is what the fund said:
“Our oil holding, APA Corporation (+54%) was one of our top contributors in the quarter as oil prices rallied due to tight supplies, which were then exacerbated by the Russian invasion of Ukraine. Although their share prices have increased considerably, both companies still look quite undervalued even using longer term oil prices in the $65-70 dollar range. Meanwhile, if times are good over the next couple of years, we expect these companies to return significant percentages of their market caps to shareholders.”
6. EPAM Systems, Inc. (NYSE:EPAM)
Number of Hedge Fund Holders: 36
EPAM Systems, Inc. (NYSE:EPAM) provides digital platform engineering and software development services. The finance guru, during the Lightning Round of his show on August 30, said that the firm was a “very fast grower” and “profitable” as well, which is why he liked them. He also urged the management of the firm to come to his show.
On August 5, Cowen analyst Bryan Bergin maintained an Outperform rating on EPAM Systems, Inc. stock and raised the price target to $440 from $400, noting the execution prowess of the firm was on full display in the second quarter.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in EPAM Systems, Inc. with 150,900 shares worth more than $44 million.
At the end of the second quarter of 2022, 36 hedge funds in the database of Insider Monkey held stakes worth $801 million in EPAM Systems, Inc., compared to 38 the preceding quarter worth $669 million.
Alongside Amazon.com, Inc., Apple Inc., and Alphabet Inc., EPAM Systems, Inc. is one of the stocks that hedge funds are monitoring.
Carillon Tower Advisers, in its Q1 2022 investor letter, mentioned EPAM Systems, Inc.. Here is what the fund has to say in its letter:
“Stock selection contributed the most while sector allocation was also positive. An underweight to communication services and an overweight to energy helped performance, while an underweight to consumer staples and an overweight to materials detracted. Stock selection was strong within healthcare and materials but was weak within information technology and industrials. EPAM Systems, Inc. offers information technology services. The company struggled amid geopolitical instability given its 14,000 employees in Ukraine and associated operational, relocation, and travel costs. The Fund sold the stock.”
5. Archer-Daniels-Midland Company (NYSE:ADM)
Number of Hedge Fund Holders: 42
Archer-Daniels-Midland Company (NYSE:ADM) makes and sells agricultural commodities and related products. In early September, Jim Cramer said that the firm was a “conservative, decent stock” and that he liked it as a play on supply chain disruptions. He added that the stock was on the road to recovery from a mid-July bottom as crop prices rebounded.
On August 12, Wolfe Research analyst Sam Margolin initiated coverage of Archer-Daniels-Midland Company with an Outperform rating and a price target of $117, noting the stock offered highly competitive dividend growth.
At the end of the second quarter of 2022, 42 hedge funds in the database of Insider Monkey held stakes worth $658 million in Archer-Daniels-Midland Company, the same as in the preceding quarter worth $625 million.
4. McDonald’s Corporation (NYSE:MCD)
Number of Hedge Fund Holders: 50
McDonald’s Corporation owns and runs fast food restaurants. On September 1, the former hedge fund manager placed the company among a group of dividend-paying stocks that he was bullish on for the coming months. He said that it can resume the long march higher real soon and was the perfect “bounce-back candidate” despite recent overhangs like cost inflation and a strong dollar.
On August 16, BMO Capital analyst Andrew Strelzik maintained an Outperform rating on McDonald’s Corporation stock and raised the price target to $300 from $285, noting that the firm was realizing accelerated growth and share gains in Europe.
At the end of the second quarter of 2022, 50 hedge funds in the database of Insider Monkey held stakes worth $2.3 billion in McDonald’s Corporation, compared to 58 the preceding quarter worth $2.7 billion.
3. Pioneer Natural Resources Company (NYSE:PXD)
Number of Hedge Fund Holders: 56
Pioneer Natural Resources Company (NYSE:PXD) is an independent oil and gas firm. The journalist investor outlined his bullish stance on the firm during the Lightning Round of his show on September 1, saying that the firm had “the largest dividend in the S&P” and it was his stock. He added that Scott Sheffield, the CEO of the firm, “knows what he’s doing and is terrific”.
On August 31, Barclays analyst Jeanine Wai maintained an Overweight rating on Pioneer Natural Resources Company stock and lowered the price target to $309 from $324, noting that energy production names had top-tier free cash flow yields.
Among the hedge funds being tracked by Insider Monkey, Wyoming-based investment firm Adage Capital Management is a leading shareholder in Pioneer Natural Resources Company with 51,665 shares worth more than $11.5 million.
In its Q1 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Pioneer Natural Resources Company was one of them. Here is what the fund said:
“Our underweight to the energy sector weighed on performance, as energy prices skyrocketed from inflationary pressures and the threat of reduced supply. We have a limited footprint within the sector but continue to look for companies that will generate strong, long-term returns such as Pioneer Natural Resources Company. Pioneer is an oil and gas exploration and production company that offers a combination of a strong asset base, quality balance sheet and compelling free cash flow yield at current commodity prices. We believe Pioneer Natural Resources Company has strong underlying drivers that will generate attractive risk-adjusted returns beyond shorter-term fluctuations in energy prices.”
2. The Coca-Cola Company (NYSE:KO)
Number of hedge fund holders: 60
The Coca-Cola Company (NYSE:KO) is a Georgia-based beverage company. The former Goldman Sachs employee recently named the firm among a basket of dividend-paying firms he was bullish on. Cramer said that the firm was “textbook defensive stock” since the high dividend yield offered investors protection from market swings.
On September 6, HSBC analyst Carlos Laboy maintained a Buy rating on The Coca-Cola Company stock and raised the price target to $76 from $72, noting the firm had new revenue drivers in Latin America.
Among the hedge funds being tracked by Insider Monkey, Nebraska-based firm Berkshire Hathaway is a leading shareholder in The Coca-Cola Company with 400 million shares worth more than $25 billion.
1. CVS Health Corporation (NYSE:CVS)
Number of Hedge Fund Holders: 65
CVS Health Corporation (NYSE:CVS) is a Rhode Island-based company that provides healthcare services. The journalist investor recently turned bullish towards the stock, saying on August 31 that he just saw that the firm was going to authorize those new shots and he thought that the stock is “a buy and a buy and a buy”.
On September 7, Evercore ISI analyst Elizabeth Anderson maintained an Outperform rating on CVS Health Corporation stock and raised the price target to $125 from $120, appreciating the decision of the firm to merge with Signify Health.
Among the hedge funds being tracked by Insider Monkey, Connecticut-based firm AQR Capital Management is a leading shareholder in CVS Health Corporation with 3.3 million shares worth more than $312 million.
In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and CVS Health Corporation was one of them. Here is what the fund said:
“Improving health remains a key impact theme for the portfolio, and over the past year or so we have increased our exposure to the health care sector, through the addition of CVS Health Corporation, which is well-positioned to help define the future of health care in terms of costs, quality and convenience.”
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This article is originally published at Insider Monkey.
