In this article, we discuss Jim Cramer’s top 5 stock picks for 2022. If you want to read our detailed analysis of these stocks, go directly to Jim Cramer’s Top 10 Stock Picks for 2022.
5. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 69
The Procter & Gamble Company (NYSE:PG) markets branded consumer packaged goods. Cramer discussed the company during his show last week, soothing investors who were panicked by the volatile start to 2022 and saying that it was still possible for investors to get ahead of the market by putting their money in “real companies” doing “real things” and having brand loyalty, identifying The Procter & Gamble Company (NYSE:PG) as one example. Cramer noted that one of the reasons The Procter & Gamble Company (NYSE:PG) is so resilient under pressure is that it can pass on added costs to consumers “without batting an eyelash”.
The Procter & Gamble Company (NYSE:PG) has featured in the portfolios of top hedge funds for quite a few years now. Among the hedge funds being tracked by Insider Monkey, London-based investment firm Cedar Rock Capital is a leading shareholder in The Procter & Gamble Company (NYSE:PG) with 7.4 million shares worth more than $1 billion.
4. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 72
Bank of America Corporation (NYSE:BAC) provides banking and financial products. As interest rates rise, hedge funds are turning to banking firms to ride the boom in their earnings. At the end of the third quarter of 2021, 72 hedge funds in the database of Insider Monkey held stakes worth $46.4 billion in Bank of America Corporation (NYSE:BAC).
Cramer recently urged investors to buy Bank of America Corporation (NYSE:BAC) in the present environment, saying that the company was one that “thrives off rate hikes” and the rally in the stock just before a Fed meeting on rates did not justify the potential of the bank. He added that 2022 could be the year of Bank of America Corporation (NYSE:BAC).
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Bank of America Corporation (NYSE:BAC) was one of them. Here is what the fund said:
“Higher long-term interest rates supported financials such as Bank of America, which has shown both defensive and offensive characteristics in the past year. We believe it continues to be the least risky large bank from a credit standpoint, with conservative underwriting and controlled risk taking, a leading consumer deposit franchise, scale and technology. It is also a leader in its commitments to sustainability, or as it terms it, responsible growth. Disclosure and reporting at all levels form a large part of this commitment, including gender diversity and equality, environmental commitments and support of communities in which it operates. In the first quarter Bank of America announced it is setting a goal of net-zero greenhouse gas (GHG) emissions in its supply chain and operations, and notably also in its financing activities, before 2050.”
3. Citigroup Inc. (NYSE:C)
Number of Hedge Fund Holders: 79
Citigroup Inc. (NYSE:C) is a diversified financial services firm. Cramer noted last week that the stock was trading “cheap” at only 80% of its “tangible book value” and looked set to take off again in the coming months as the bank resumed share buybacks.
Citigroup Inc. (NYSE:C) stock has offered institutional investors some much-needed stability amid a volatile market in the past few months. Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Harris Associates is a leading shareholder in Citigroup Inc. (NYSE:C) with 28 million shares worth more than $1.9 billion.
In its Q1 2021 investor letter, Artisan Partners Limited Partnership, an asset management firm, highlighted a few stocks and Citigroup Inc. (NYSE:C) was one of them. Here is what the fund said:
“We fully exited position in Citigroup. Global financial services company Citigroup made a $900 million clerical error and received a public reprimand from federal regulators. This, after a decade focused on process control, information technology and risk systems, makes the error substantially more costly than just the $900 million mistake. Regulators believe the company’s risk management improvements have fallen short of expectations. To rectify the situation, a process and technology spending surge could negatively affect 2021-2022 profits by 10% to 20%. Trust and confidence are important in large financial institutions, and this incident combined with the CEO’s sudden retirement shook ours.”
2. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 81
AbbVie Inc. (NYSE:ABBV) makes and sells pharmaceuticals. Elite hedge funds hold large stakes in the company. At the end of the third quarter of 2021, 81 hedge funds in the database of Insider Monkey held stakes worth $4.1 billion in AbbVie Inc. (NYSE:ABBV).
In late December, Cramer picked AbbVie Inc. (NYSE:ABBV) as one of the stocks that would go higher in the coming months primarily because of the potential its drugs offered. Cramer singled out the bright prospects of Rinvoq, an arthritis treatment, in particular, underlining that the drug would help AbbVie Inc. (NYSE:ABBV) exceed earnings expectations.
1. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 101
The Walt Disney Company (NYSE:DIS) is a diversified media and entertainment company. Cramer outlined his bullish thesis for the company during his show on January 22, noting that weaknesses in companies that traded on “hype and hope” would allow firms with “real earnings” to surge ahead in 2022. He identified Netflix as the former and Disney as the latter.
For the hedge fund industry, The Walt Disney Company (NYSE:DIS) is one of the most reliable businesses on the market. At the end of the third quarter of 2021, 101 hedge funds in the database of Insider Monkey held stakes worth $9.4 billion in The Walt Disney Company (NYSE:DIS).
In its Q4 2020 investor letter, Harding Loevner, an asset management firm, highlighted a few stocks and The Walt Disney Company (NYSE:DIS) was one of them. Here is what the fund said:
“One of the original constituents of the Nifty Fifty holds a place in our portfolio today. When we bought Disney three years ago, we wrote that “we view Disney theme parks in the US, Europe, and China as resistant to online substitution.” We did not reckon on a pandemic, which closed all of them, and sent all of usto our couches. Disney, however, wasready for us, brilliantly illustrating the importance of management foresight and change management. Or, as Louis Pasteur said, “chance favors the prepared mind.
A century after its founding in 1923, Disney is in the middle of a bold shift from its legacy media networks & entertainment model—with cable TV, theme parks, and theater films dominating its earnings—to a direct-to-consumer streaming media model. The keys to Disney’s transition: matchless storytelling, coupled with financial strength. The company reliably creates content that people all over the world are eager to consume. It also hastened spending on original content to attract subscribers to its new streaming platform. These factors have allowed Disney to weather the pandemic having expanded its direct engagement with customers. Such connections yield a rich harvest of insights used to customize offerings on a mass scale, reinforcing that engagement in a virtuous circle and thereby raising the lifetime value of each customer. Subscribers to Disney+ reached 86.8 million one year after launch, compared to the 60 – 90 million management projected to reach in 2024. To be sure, Netflix, Apple, and Amazon remain formidable competitors in new-era streaming entertainment (mind what we said about everyone standing up at once), but there’s fight left in this old dog.”
You can also take a peek at 10 Reddit Stocks Hedge Funds Like and 10 Stocks That Delivered Upbeat Financial Results.
