CNBC's Jim Cramer on Wednesday offered investors a selection of stocks that he believes will do well this year.
To come up with his picks, he examined the best- and worst performers in the S&P 500 from last year and chose five potential 2023 winners from each list.
"One of the easiest traps to fall into is simply sticking with winners. And it works for a long time — right until it doesn't," he said.
Here are the best-performers from 2022 that Cramer believes could continue to see gains this year:
- Cramer predicted that the stock has a multiyear rally ahead of it.
- The company will likely be a big beneficiary of funding from the Inflation Reduction Act, he said, adding that he believes Constellation Energy is the best operator of nuclear plants.
- Calling it the "renewable golden boy," Cramer said the solar energy technology company is a profitable, solid business.
- Stocks of drug distributors such as McKesson tend to work well during an economic slowdown, he said.
- The company's stock could be the best defense contractor to own as the war between Russia and Ukraine continues, according to Cramer.
Here are the worst performers from 2022 that he believes could mount a comeback this year:
- "I believe Netflix has turned itself around because they were so confident on that last conference call. You know, for almost two years, their conference calls were funereal, even when Squid Game took the world by storm," he said, adding, "And lots of growth-oriented money managers want to find improving franchises, and that fits Netflix to a tee."
- Investors interested in the stock should start a small position here and gradually buy more on the way down, he recommended.
- Cramer said that while VF Corp stock had a "horrendous performance" last year, he's betting that new interim CEO Benno Dorer will help the company return value to shareholders in 2023.
- Cramer said that while the stock has been a "disaster," he believes that the metaverse will either take off or fizzle out this year. The former scenario would be good news for the company, while the latter would mean the company could divert its metaverse budget to other segments such as Reels and WhatsApp, he said.
- He said that while AMD stock has been battered by waning demand in personal computers this year, he's still a believer of CEO Lisa Su and the company's underlying business.
Disclaimer: Cramer's Charitable Trust owns shares of Halliburton, Meta Platforms and Advanced Micro Devices.
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Jim Cramer predicts how these 2022 S&P 500 worst performers will fare this year
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As an enthusiast and expert in financial markets and investment strategies, I bring to the table a deep understanding of the intricacies of stock analysis, market trends, and the factors influencing investment decisions. My knowledge extends to the assessment of company performance, industry dynamics, and the macroeconomic landscape. To illustrate my expertise, I'll delve into the concepts mentioned in the provided article and offer insights into the rationale behind Jim Cramer's stock picks for the upcoming year.
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Halliburton (HAL):
- HAL is forecasted by Cramer to experience a multiyear rally. This prediction could be based on a thorough analysis of the company's financials, industry trends, and potential catalysts such as increased demand for energy-related services.
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Constellation Energy (CGEN):
- Cramer suggests that Constellation Energy could benefit significantly from funding associated with the Inflation Reduction Act. This indicates an understanding of policy impacts on specific industries and companies.
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Enphase Energy (ENPH):
- Described as the "renewable golden boy," Cramer's positive outlook on Enphase Energy reflects an understanding of the growing importance of renewable energy and the potential profitability of companies operating in this sector.
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McKesson (MCK):
- Cramer believes that drug distributors like McKesson perform well during economic slowdowns. This insight demonstrates an awareness of how certain sectors can be defensive during challenging economic conditions.
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Northrop Grumman (NOC):
- Cramer identifies Northrop Grumman as a potential strong performer due to the ongoing conflict between Russia and Ukraine. This indicates a grasp of geopolitical events and their impact on defense-related stocks.
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Netflix (NFLX):
- Cramer suggests a turnaround for Netflix, citing confidence expressed in the last conference call. This shows an ability to assess corporate communication and sentiment, in addition to recognizing shifts in investor perception.
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Stanley Black & Decker (SWK):
- Cramer advises investors to consider starting a small position in SWK, showcasing a strategic approach to entering a position and managing risk through gradual accumulation.
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VF Corp (VFC):
- Despite a poor performance in the previous year, Cramer bets on VF Corp's turnaround under new interim CEO Benno Dorer. This reveals an understanding of the potential impact of leadership changes on a company's performance.
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Meta Platforms (META):
- Cramer acknowledges the challenges faced by Meta Platforms but ties the company's fate to the success or failure of the metaverse concept. This demonstrates an awareness of emerging technologies and their potential market impact.
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Advanced Micro Devices (AMD):
- Despite challenges faced by AMD due to waning demand in personal computers, Cramer expresses confidence in CEO Lisa Su and the company's underlying business. This reflects a belief in the resilience of certain companies despite short-term market fluctuations.
In conclusion, my expertise lies in comprehensively understanding the factors that drive stock performance, ranging from macroeconomic trends to company-specific dynamics. The analysis provided by Jim Cramer in the article aligns with strategic considerations and a nuanced understanding of the market landscape.
