In this article, we discuss Jim Cramer’s top 4 recession-proof stock picks. To read about Jim Cramer’s recession strategy, go to Jim Cramer’s Recession-Proof Stock Picks.
4. Danaher Corporation (NYSE:DHR)
Jim Cramer last month predicted that Danaher is going to have a great year in 2023 and called the company “one of the best-run companies in any industry.” Danaher has been increasing its dividends for the past 8 years. The company has a market cap of $190 billion. It’s a conglomerate that makes medical devices, diagnostics products, equipment, and much more.
Danaher is also very popular among hedge funds. A total of 89 funds tracked by Insider Monkey reported having stakes in Danaher as of the end of the third quarter, compared to 82 funds in the previous quarter.
Here is what Stewart Asset Management has to say about Danaher Corporation (NYSE:DHR) in its Q3 2022 investor letter:
“We also need to point out one global consequence of the rapid rise in interest rates: an irrepressibly strong dollar. This hurts the reported earnings of U.S. companies who sell their goods and services overseas. Foreign currency earnings translate into fewer dollars and thus lower earnings. Most of the companies in your portfolios gain a notable amount of earnings from their international operations. While the strength or weakness of a currency doesn’t change the quality of a business or its longer-term earnings power, it can change the reported earnings of a company over short periods of time. It is difficult to forecast this effect accurately because many of our companies manufacture where they sell, which to some extent dulls the sharp negative effect of a surging dollar. Danaher (NYSE:DHR), among others, is a good example.”
3. Pfizer Inc. (NYSE:PFE)
Pfizer is yet another healthcare stock Jim Cramer is bullish on. Last month, Cramer praised the company’s acquisition of Arena Pharmaceuticals, Biohaven and Global Blood Therapeutics. Cramer added that Pfizer stock is a steal.
A total of 77 hedge funds tracked by Insider Monkey have stakes in Pfizer. Pfizer has increased its dividends consistently for the last 12 years.
2. UnitedHealth Group Inc. (NYSE:UNH)
Minnesota-based managed healthcare and insurance company United Health has a market cap of over $480 billion and is stable enough to survive through any recession. In the summer of 2022, when companies were bracing for a recession, United Health announced a 13.8% dividend increase to $1.65 quarterly per share.
Jim Cramer called United Health “best of breed” managed healthcare stock in his program last month.
Here is what Stewart Asset Management has to say about UnitedHealth Group Incorporated (NYSE:UNH) in its Q3 2022 investor letter:
“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.”
1. Edwards Lifesciences Corporation (NYSE:EW)
Jim Cramer likes Edwards Lifesciences because he thinks the company’s underlying business is strong. The California-based medical technology company specializes in artificial heart valves and hemodynamic monitoring.
Edwards Lifesciences saw a strong growth in hedge fund sentiment in the third quarter. Insider Monkey’s database shows that 57 hedge funds ended the third quarter with the stock in their portfolios, compared to just 39 hedge funds in the previous quarter.
Here is what Wedgewood Partners specifically said about Edwards Lifesciences Corporation (NYSE:EW) in its Q3 2022 investor letter:
“Edwards Lifesciences Corporation (NYSE:EW) reported just +5% growth in revenue (foreign exchange adjusted) compared to a year ago. While this quarter represented a deceleration in revenue growth from earlier this year, much of that was due to hospital staffing shortages and the vagaries of global healthcare systems emerging from pandemic disruptions. The Company received FDA approval for its minimally invasive mitral valve repair system, PASCAL, and also presented compelling related clinical data, which should help support accelerating growth over the next few years. As for Edwards’ core TAVR system, there continues to be a (unfortunately) pent-up, untreated population suffering from severe aortic stenosis that will finally be able to find their way back into healthcare systems as labor market pressures ease.”
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