In this article, we will take a look at Jim Cramer’s top 5 stock picks for 2023 To see more such companies, go directly to Jim Cramer’s Top 10 Stock Picks for 2023.
5. Stanley Black & Decker, Inc. (NYSE:SWK)
YTD Stock Performance Through November 22: +17%
Stanley Black & Decker, Inc. (NYSE:SWK) ranks 5th in our list of Jim Cramer’s top 10 stock picks for 2023. When the year started Cramer recommended investors to initiate small stakes in Stanley Black & Decker, Inc. (NYSE:SWK) and slowly add to their positions. Earlier this month Cramer reiterated his bullish stance on the company and said his investing club members should consider the stock. Cramer has been bullish on Stanley Black & Decker, Inc. (NYSE:SWK) for a long time. In March 2022 Cramer had said during a program that Stanley Black & Decker, Inc. (NYSE:SWK) is cheap.
So far Cramer’s call about Stanley Black & Decker, Inc. (NYSE:SWK) has proven to be correct. Stanley Black & Decker, Inc. (NYSE:SWK) has gained about 17% so far this year through November 22.
As of the end of the third quarter of 2023, 19 hedge funds tracked by Insider Monkey had stakes in Stanley Black & Decker, Inc. (NYSE:SWK).
Appleseed Fund made the following comment about Stanley Black & Decker, Inc. (NYSE:SWK) in its Q1 2023 investor letter:
“During the most recent quarter, Appleseed Fund added three new equity holdings: Medtronic (MDT), Stanley Black & Decker, Inc. (NYSE:SWK), and Synovus Financial (SNV). Stanley Black & Decker is the world’s largest tool manufacturer. It produces power tools, hand tools, storage, digital tool solutions, lifestyle products, outdoor products, engineered fasteners, and other industrial equipment. 2022 was quite a forgettable year for the Company with its stock price falling by roughly 60%. Due to supply chain issues, bloated inventories, inflationary pressures, and weaker demand, the Company badly missed its original 2022 guidance. With recessionary fears, waning earnings momentum, a more elevated leverage profile, and reliance on the U.S. construction market, it is of no surprise how poorly the stock price behaved last year. In our view, the sell-off has been excessive with the stock price trading near March 2020 pandemic lows and at levels otherwise not seen since early 2014. We view the stock at washed-out levels with a favorable profile going forward.”
4. Constellation Energy Corporation (NASDAQ:CEG)
YTD Stock Performance Through November 22: +50%
Jim Cramer was bullish on Constellation Energy Corporation (NASDAQ:CEG) during the start of 2023 as he believed the stock would benefit from the US government’s spending for green energy under the Inflation Reduction Act. In December 2022 Cramer said that he liked Constellation Energy Corporation (NASDAQ:CEG) because nuclear energy is the best option for carbon-free energy production. Cramer also liked Constellation Energy Corporation (NASDAQ:CEG) because he believed ESG-focused funds were showing interest in it.
Constellation Energy Corporation (NASDAQ:CEG) shares have gained a whopping 50% this year through 2023.
As of the end of the third quarter of 2023, 50 hedge funds tracked by Insider Monkey reported having stakes in Constellation Energy Corporation (NASDAQ:CEG).
Alger Capital made the following comment about Constellation Energy Corporation (NASDAQ:CEG) in its Q3 2022 investor letter:
“Constellation Energy Corporation (NASDAQ:CEG) is America’s leading clean energy company, based on carbon-free production. The company is the largest supplier of clean energy and sustainable solutions to homes, businesses, governments, community aggregations, and a range of wholesale customers (such as municipalities, cooperatives, and other end markets) across the continental U.S., backed by approximately 32,400 megawatts of generating capacity consisting of nuclear, wind, solar, natural gas and hydroelectric assets. Constellation produces nearly 10% of the nation’s carbon-free energy.
Shares outperformed during the third quarter primarily due to the Inflation Reduction Act (IRA). Signed into law in august, the bill provides a nuclear production tax credit of approximately $43.75 per megawatt hour of energy generated. This credit favorably impacted earnings, resulting in an increase in Constellation’s share price.”
3. Netflix, Inc. (NASDAQ:NFLX)
YTD Stock Performance Through November 22: +65%
Jim Cramer has been bullish on Netflix, Inc. (NASDAQ:NFLX) throughout 2023. In February 2023 Cramer said about Netflix:
“You got the pain, you get the gain. Stick with it.”
Netflix, Inc. (NASDAQ:NFLX) shares have gained about 65% year to date.
After Netflix, Inc. (NASDAQ:NFLX)’s first quarter results, Cramer reiterated in a program on CNBC that Netflix stock was a bargain.
RiverPark Advisors made the following comment about Netflix, Inc. (NASDAQ:NFLX) in its Q3 2023 investor letter:
“Netflix, Inc. (NASDAQ:NFLX): NFLX was a top detractor in the quarter on weaker than expected reported and guided revenue, despite 2Q subscriber growth that was well above expectations (+5.9 million versus estimates of +2.1 million). The company’s subscriber growth re-accelerated following the company’s crack down on password sharing, and the rollout of the advertising supported subscriber offering known as the Ad Tier, but the average revenue per user came in below expectations and is expected to remain muted in the near term. NFLX reiterated expectations for full year 2023 operating margins of 18-20%, and guided free cash flow to at least $5 billion, up from prior guidance of $3.5 billion. Despite the positive momentum in the company’s business, market participants took comments from management at a recent conference to mean revenue growth may be slower in the coming years than expected. This was not our interpretation of these comments.
In fact, the recent re-acceleration of subscriber growth, plus price increases on premium memberships and a stabilization of content investments, should position the company for low double digit annual revenue growth over the next few years while driving improved operating margin to more than 25% (revenue grew 3% for 2Q23 and operating margin was 22.3%, up from 13% in 2019). We also believe that the stabilization of content spend should allow the company to continue to scale its FCF.”
2. Advanced Micro Devices, Inc. (NASDAQ:AMD)
YTD Stock Performance Through November 22: +86%
In January this year, Jim Cramer painted a contrast between two analyst calls on Advanced Micro Devices, Inc. (NASDAQ:AMD). One of these calls was bullish, while the other was bearish. Cramer said that both were right, since the bearish call was right about Advanced Micro Devices, Inc. (NASDAQ:AMD) in the short term. Cramer said that the optimist call on Advanced Micro Devices, Inc. (NASDAQ:AMD) would eventually would be proven right since he believed the downturn in the semiconductor market would end.
“The bearish analyst [is] right as rain because AMD’s business is awful now and shows no signs of improving, but over the long-haul, the bullish analyst is going to be right, because eventually, the semiconductor downturn will end,” Cramer said.
According to CNBC, Advanced Micro Devices, Inc. (NASDAQ:AMD) is in Jim Cramer’s investing Club’s Bullpen watch list for stocks that could become part of the portfolio.
Advanced Micro Devices, Inc. (NASDAQ:AMD) shares have gained about 86% in 2023 through November 22.
As of the end of the third quarter of 2023, 110 hedge funds tracked by Insider Monkey had stakes in Advanced Micro Devices, Inc. (NASDAQ:AMD).
Artisan Global Opportunities Fund made the following comment about Advanced Micro Devices, Inc. (NASDAQ:AMD) in its Q2 2023 investor letter:
“Among our top contributors were Advanced Micro Devices, Inc. (NASDAQ:AMD), NU Holdings and Netflix. AMD’s data center CPUs are used in the cloud service provider (CSP) servers. In addition to the broader secular tailwind from cloud adoption, the company has a performance and pricing advantage over Intel, which we believe will enable it to continue capturing market share. However, the recent stock price rally was due to growing excitement around the company’s AI exposure. It will launch its new MI300 graphics processing unit (GPU) chip later this year to compete against the dominant market leader NVIDIA. Similar to its approach that won market share from Intel within the CPU market, AMD’s product will aim to provide similar performance at a more attractive price. AMD is already working with Microsoft and Meta, while Amazon publicly stated that it is evaluating AMD’s inferencing chips. Using assumptions around the total GPU market size, potential market share gains and price points, our research indicates this could be a $20 billion opportunity for AMD. That would nearly double its revenue. While the company has not historically missed many deadlines, there is execution risk as it works to manufacture and distribute these complex chips at scale, which, combined with an elevated valuation after the stock’s strong performance run, led us to trim the position.”
1. Meta Platforms, Inc. (NASDAQ:META)
YTD Stock Performance Through November 22: +170%
In February, Jim Cramer said that there was a time when he was “hurt” seeing Meta Platforms, Inc. (NASDAQ:META)’ results but he did not lose hope as he believed there was a path forward for the company via discipline and cost cutting. Cramer said that’s exactly what Mark Zuckerberg achieved and Cramer was pleased to see the Q4 2022 results of the social media giant.
Meta Platforms, Inc. (NASDAQ:META) has indeed surprised everyone this year. Meta Platforms, Inc. (NASDAQ:META) started to use AI to improve its algorithm and increase engagement on its platforms. Meta Platforms, Inc. (NASDAQ:META) has gained about 170% year to date through November 22.
Weitz Investment Management Large Cap Equity Fund made the following comment about Meta Platforms, Inc. (NASDAQ:META) in its Q3 2023 investor letter:
“As for other quarterly contributors, Alphabet, Inc., (GOOG) and Meta Platforms, Inc. (NASDAQ:META) added to their exceptional year-to-date returns. Meta Platforms and Alphabet were the true year-to-date standouts. After steep declines in 2022, both stocks rebounded sharply due to a combination of solid fundamentals, disciplined operational execution, and improved sentiment. Despite outsized gains and attention, we think both Alphabet and Meta remain undervalued.”
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