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Jim Cramer’s Top 10 Stock Picks This Week

In this article, we will take a detailed look at Jim Cramer's Top 11 Stock Picks This Week. For a quick overview of such stocks, read our article Jim Cramer's Top 5 Stock Picks This Week.

Jim Cramer earlier this week talked about "froth" in the market which he believes could be a "bummer" albeit "enjoyable" at the same time. Cramer said that while the market has been up for 14 out of the last 15 weeks, many circles believe that is not a good development since too much enthusiasm in the market could be a telltale sign of future declines. Jim Cramer gave some examples of what he calls "exuberance" in the market. Cramer talked about Arm Holdings' huge stock price gains posted recently. Arm Holdings stock is up about 84% over the past one month. The stock is rising mostly on the back of the AI enthusiasm as investors believe the UK-based semiconductor company could see a huge demand for its chips just like Nvidia.

Cramer Talks About Market "Froth" and Lack of Discipline

But these gains are just too much for Cramer, who yelled "give me a break" when talking about Arm Holdings. Cramer said most of the people buying ARM have no idea what they are doing and said they "just have no discipline."

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Cramer also said that the NASDAQ is currently going through a "parabolic rally" and such rallies are "never sustainable."

Given this pragmatic and realistic stance of Jim Cramer, it'd be interesting to see which stocks he's bullish on and recommends buying even during this market environment where "froth" is making it difficult for investors to evaluate companies realistically.

Methodology

For this article we watched several programs of Jim Cramer aired this week on CNBC and picked 10 stocks he's recommending investors to buy. Unlike Microsoft Corp (NASDAQ:MSFT), Apple Inc (NASDAQ:AAPL) and Amazon.com Inc (NASDAQ:AMZN), which Jim Cramer often talks about during his programs, you will see some new names which Cramer is bullish on.

Jim Cramer's Top Stock Picks This Week
Jim Cramer's Top Stock Picks This Week

10. Toyota Motor Corp (NYSE:TM)

Number of Hedge Fund Investors: 15

Cramer was recently asked about his thoughts on Toyota Motor Corp (NYSE:TM). He said while it's a tough call, he believes Toyota Motor Corp (NYSE:TM) "is going higher."

"Buy some and then wait for it to come down."

Earlier this month, Toyota Motor Corp (NYSE:TM) raised its full fiscal year profit as it reported Q3 results. Profit in the third quarter was ¥1.36 trillion, up from ¥727.9 billion in the same period in 2022.

Out of the 910 funds tracked by Insider Monkey, 15 hedge funds had stakes in Toyota Motor Corp (NYSE:TM). The most significant stake in Toyota Motor Corp (NYSE:TM) is owned by Ken Fisher's Fisher Asset Management which owns a $1.1 billion stake in Toyota Motor Corp (NYSE:TM). In addition to TM, hedge funds also like Microsoft Corp (NASDAQ:MSFT), Apple Inc (NASDAQ:AAPL) and Amazon.com Inc (NASDAQ:AMZN).

9. Iron Mountain Inc (NYSE:IRM)

Number of Hedge Fund Investors: 18

Information management and data center services company Iron Mountain Inc (NYSE:IRM) ranks ninth in our list of the top Jim Cramer stock picks this week. Jim Cramer was recently asked about this thoughts on Iron Mountain Inc (NYSE:IRM). Cramer said he always liked Iron Mountain Inc (NYSE:IRM) because it has a healthy dividend yield as well as posted strong growth in stock price (30%+ over the past one year). Cramer said:

"I reiterate that I like this stock."

As of the end of the third quarter of 2023, 18 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Iron Mountain Inc (NYSE:IRM). At the end of December 2023, Ken Griffin's Citadel Investment Group had a $139 million stake in Iron Mountain Inc (NYSE:IRM).

8. Sempra (NYSE:SRE)

Number of Hedge Fund Investors: 34

Utility company Sempra (NYSE:SRE) is one of the top stock picks of Jim Cramer this week. Cramer recently said that he likes Sempra (NYSE:SRE) "very very much." Cramer said the stock has come down. Cramer said Sempra (NYSE:SRE) has a "good yield" and "some growth."

"I would actually pull the trigger and buy that stock right here."

ClearBridge Large Cap Value Strategy made the following comment about Sempra (NYSE:SRE) in its Q3 2023 investor letter:

“Our two utilities Sempra (NYSE:SRE) and Edison International were also negatively impacted by rising rates, although both outperformed the utility benchmark. We maintain a large active overweight to Sempra and added opportunistically to Edison to reflect its strong fundamentals.”

7. Builders Firstsource, Inc. (NYSE:BLDR)

Number of Hedge Fund Investors: 53

Building materials company Builders Firstsource, Inc. (NYSE:BLDR) ranks seventh in our list of Jim Cramer's top stock picks this week.

Cramer earlier this week said in a program that he wonders "how the heck this thing get to be such a stud during S&P 500's run to 5,000."

Cramer answered this question: "lowest prices, best service."

Out of the 910 funds tracked by Insider Monkey, 53 hedge funds had stakes in Builders Firstsource, Inc. (NYSE:BLDR). The biggest stake in Builders Firstsource, Inc. (NYSE:BLDR) is owned by Cliff Asness's AQR Capital Management which owns a $196 million stake in Builders Firstsource, Inc. (NYSE:BLDR).

Bonhoeffer Capital Management stated the following regarding Builders FirstSource, Inc. (NYSE:BLDR) in its fourth quarter 2023 investor letter:

“Builders FirstSource, Inc. (NYSE:BLDR) is the United States’ largest building product distributor (2.6% market share). It serves large single family and multi-family homebuilders and re-modelers. BLDR has over 115,000 customers with a 90% customer retention rate. BLDR has over 30,000 employees at over 570 sites including 160 truss and 120 millwork facilities serving 89 of the top 100 MSAs in the United States in 43 states. Over 75% of its revenue is associated with value-added or specialty products. This large portion of value-added and specialty products and services allows BLDR to generate industry leading gross margins of 35%.

The predecessor to BLDR was Builder’s Supply and Lumber Company which was purchased by JLL Partners in 1998. In 2005, BLDR went public through an IPO and in July 2015, the company completed its first large acquisition of ProBuild, a large competitor with 400 locations. In January 2021, BLDR merged with BMC, another large competitor with 550 locations. In August 2021, BLDR purchased WTS Paradigm, a housing design software and services company, extending BLDR’s support to housing design and supplying building materials to homebuilders. Since 2015, BLDR has made 23 tuck-in acquisitions. The current CEO, David Rush, has served as the lead on the integration of the acquisitions BLDR has made since 2015…” (Click here to read the full text)

6. Constellation Brands, Inc. (NYSE:STZ)

Number of Hedge Fund Investors: 50

Jim Cramer was earlier this week asked about Anheuser-Busch Inbev SA (NYSE:BUD). Cramer said he likes the stock along with other beverage names like Molson Coors Beverage and Constellation Brands, Inc. (NYSE:STZ). However, Cramer also lamented that "people don’t seem to like the beer companies."

Cramer recommended buying Constellation Brands, Inc. (NYSE:STZ) and said his charitable trust also owns a position in Constellation Brands, Inc. (NYSE:STZ).

Like Microsoft Corp (NASDAQ:MSFT), Apple Inc (NASDAQ:AAPL) and Amazon.com Inc (NASDAQ:AMZN), Jim Cramer is also bullish on Constellation Brands (STZ).

As of the end of the third quarter of 2023, 50 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Constellation Brands, Inc. (NYSE:STZ). The biggest stake in Constellation Brands, Inc. (NYSE:STZ) is owned by Israel Englander's Millennium Management which owns a $246 million stake in Constellation Brands, Inc. (NYSE:STZ).

The company talked about guidance during its Q3 earnings call:

"As we look towards the end of fiscal ’24, our guidance for enterprise comparable EPS, excluding Canopy equity and earnings remains unchanged at $12 to $12.20 underpinned by the following expectations. First, an unchanged 8% to 9% net sales growth outlook but a higher 7% to 8% operating income growth expectation for our Beer business. As stated in our prior calls this year and at our recent Investor Day event for our beer net sales, we continue to expect pricing to be between 1% to 2% and mid to high single-digit volume growth in fiscal ’24.

And we still anticipate shipment volumes for the second half to account for approximately 45% of the full year total. Bill already addressed the drivers of the uplift in our beer operating income growth guidance but it’s also important to note that we still expect beer operating margin to be approximately 38% for the full year. Second, for our Wine & Spirits business, we now expect a decline of 7% to 9% in organic net sales and a decline of 6% to 8% in operating income, excluding the impact of the divested wine brands that are no longer part of our results. Bill also already addressed the drivers for these revisions. Third, from a corporate expense perspective, we now expect that to be approximately $260 million to $270 million for the full year which includes a slightly lower end to the range versus our prior expectation.

And similarly, our interest expense expectations are now slightly lower at approximately $450 million. And last but not least, we continue to expect our comparable effective tax rate, excluding Canopy, to be approximately 19% and despite the additional $215 million of share repurchases executed in the third quarter, we also continue to anticipate weighted average diluted shares outstanding to be approximately $184 million. Beyond the P&L, for free cash flow, we expect to be in the range of $1.4 billion to $1.5 billion for fiscal ’24, reflective of $2.6 billion to $2.8 billion in operating cash flow and $1.2 billion to $1.3 billion of CapEx. In closing, we continue to deliver industry-leading results in our beer business and remain confident in our ability to achieve our stated EPS targets for this fiscal year despite incremental category headwinds affecting our Wine & Spirits business.

As we look further ahead, we remain excited about continuing opportunities to build shareholder value over the medium term, which we hope to achieve by capturing the substantial growth opportunities that exist for our Beer business, executing against our consistent, disciplined and balanced capital allocation priorities and delivering enhanced performance in Wine & Spirits, supported by the significant transformation that business has undergone and the actions that we are taking to improve this business."

Read the entire earnings call transcript here.

 

Click to continue reading and see Jim Cramer’s Top 5 Stock Picks This Week.

 

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Disclosure. None. Jim Cramer's Top 10 Stock Picks This Week was initially published on Insider Monkey.