Jim Cramer’s Recession Portfolio: Top 10 Stock Picks

In this article, we'll look at Jim Cramer's top 10 stock picks for a recession. If you want to explore similar stocks that Jim Cramer recommends for a recession, you can also check out Jim Cramer's Recession Portfolio: Top 5 Stock Picks.
Jim Cramer's 3 possible scenarios for a recession
Last month, former hedge fund manager and TV star Jim Cramer of Mad Money on CNBC broke down three possible types of recession he thinks are likely. He categorized his recession scenarios as mild, moderate and severe, and also suggested that each scenario would require a different portfolio. Jim Cramer said he thinks a mild recession is more likely because "the consumer is in great shape," according to major US banks. Here's what the journalistic investor said:
"Considering the strong job market and all the money people have been saving during the pandemic, it's possible the consumer will weather a wave of disappointment."
Jim Cramer also noted that many companies were anticipating a recession and therefore hit bottoms that were much worse than the shape of the market. He noted that stocks that hit a significant bottom in anticipation of a moderate to severe recession also rallied briefly as market conditions were better than expected. Jim Cramer said, "If Wall Street thinks we're headed for a deep recession, not just a mild downturn..." investors should have high-yielding stocks on their radar that have enough cash flow to "still own their..." Making numbers". Finally, the veteran stock market pundit suggested "ultimate defensive plays" for the severe nature of the recession.
Investors are shifting their focus to defensive stocks as recession fears flood the market. Some of the best defensive players to weather a recession include The Coca-Cola Company (NYSE:KO), The Procter & Gamble Company (NYSE:PG) and Colgate-Palmolive Company (NYSE:CL).
Jim Cramer's Recession Portfolio: Top 10 Stock Picks
Our methodology
We selected these stocks from Jim Cramer's July 22nd program, in which he recommended several stocks for mild, severe and moderate recession scenarios.
Jim Cramer's Recession Portfolio: Top 10 Stock Picks
10. Micron Technology, Inc. (NASDAQ:MU)
Number of hedge fund holders: 78
Micron Technology, Inc. (NASDAQ:MU) is Jim Cramer's top pick for a mild recession. He sees the stock rally above $70 and on July 29th Micron Technology, Inc. (NASDAQ:MU) is trading at $62.07. At the end of the first quarter of 2022, 78 hedge funds held shares in Micron Technology, Inc. (NASDAQ:MU). The combined value of these shares was $3.42 billion.
On July 26, Micron Technology, Inc. (NASDAQ:MU) announced that it has begun production of the world's first 232-layer NAND. The new NAND offers the highest capacity and power efficiency over the company's previous NANDs and is designed to facilitate data-intensive use cases in both client and cloud applications.
UBS is also bullish on Micron Technology, Inc. (NASDAQ:MU), listing the company among its top conviction picks. UBS analysts have a target price of $90 and an Overweight Buy rating on Micron Technology, Inc. (NASDAQ:MU). UBS believes the company's management will deliver sustainable gross margins even as consumer demand weakens in 2023.
During the second quarter of 2022, Bourgeon Capital increased its stake in Micron Technology, Inc. (NASDAQ:MU) by 27%. As of June 30, Bourgeon Capital is the majority shareholder of Micron Technology, Inc. (NASDAQ:MU) and its shares in the company are valued at $4.37 million.
While Micron Technology, Inc. (NASDAQ:MU) is a stock that can weather a mild recession, The Coca-Cola Company (NYSE:KO), The Procter & Gamble Company (NYSE:PG) are among the ultimate defenders. , and Colgate-Palmolive Company (NYSE:CL).
9. DR Horton, Inc. (NYSE:DHI)
Number of hedge fund holders: 52
DR. Horton, Inc. (NYSE:DHI) is a leading American homebuilder engaged in the acquisition and development of real estate in 33 states. Jim Cramer recommends D.R. Horton, Inc. (NYSE:DHI) for a mild recession, noting that the company reported better-than-expected earnings for the third quarter of fiscal 2022 and is also trading at bargain prices. As of July 29, D.R. Horton, Inc. (NYSE:DHI) has a trailing 12-month PE ratio of 5.04 and offers an expected dividend yield of 1.16%.
On July 21st, D.R. Horton, Inc. (NYSE:DHI) released results for the third quarter of fiscal 2022. The company reported revenue growth of 20.64% year over year and reported revenue of $8.79 billion for the quarter. The company's earnings per share topped Wall Street's expectations by $0.15 to come in at $4.67.
On July 22, Citi analyst Anthony Pettinari raised his target price on D.R. Horton, Inc. (NYSE:DHI) to $90 from $73 and reiterated a Buy rating on the shares. The analyst cut earnings estimates for the entire housing sector, citing near-term volume pressures but said he sees upside potential for D.R. Horton, Inc. (NYSE:DHI).
At the end of the first quarter of 2022, 52 hedge funds held shares in D.R. Horton, Inc. (NYSE:DHI). The combined value of these shares was $1.94 billion. Of these, Egerton Capital Limited was the largest shareholder in D.R. Horton, Inc. (NYSE:DHI) and owned $582.58 million of shares in the company as of March 31.
Here's what Palm Valley Capital Management, an investment management firm, says about D.R. Horton, Inc. (NYSE:DHI) in its Q2 2022 Investor Letter:
“Vidler Water was built by house builder D.R. Horton (NYSE:DHI) for $15.75 per share in the second quarter, a modest 19% premium over the 90-day volume-weighted average price. Dr. Horton may use Vidler's water rights to meet state requirements to have water resources available prior to breaking ground for new Nevada housing developments. The takeover price was below our valuation, but D.R. Horton was the only real buyer who put himself at the helm for Vidler's fortune. The deal appears to have leaked early as the stock has surged in the weeks leading up to the announcement.”
8. Amazon.com, Inc. (NASDAQ:AMZN)
Number of hedge fund holders: 271
On July 28, Amazon.com, Inc. (NASDAQ:AMZN) reported earnings for the second quarter of fiscal 2022. The company reported a loss per share of $0.20, missing estimates by $0.32. Dollar. However, the company's revenue for the quarter was $121.23 billion, up 7.21% year over year and beating Wall Street estimates by $2.09 billion.
Jim Cramer believes Amazon.com, Inc. (NASDAQ:AMZN) is one of the few retail names that can weather a mild recession. At Amazon.com, Inc. (NASDAQ:AMZN), he's bullish on its advertising and cloud businesses. In the second quarter of 2022, Amazon.com, Inc. (NASDAQ:AMZN)'s cloud business represented $19.74 billion of its net sales, up 33% year-on-year from $14.8 billion.
Wall Street is bullish on Amazon.com, Inc. (NASDAQ:AMZN). On July 29, JPMorgan analyst Doug Anmuth raised his price target on Amazon.com, Inc. (NASDAQ:AMZN) to $185 from $175, reiterating a buy-side overweight stance on the shares. Anmuth also renamed Amazon.com, Inc. (NASDAQ:AMZN) as one of its top picks, saying Amazon.com, Inc. (NASDAQ:AMZN) will continue to drive revenue growth in the industry despite macroeconomic pressures in the second half of 2022 with strong execution across its retail and AWS stores.
At the end of the first quarter of 2022, 271 hedge funds held shares in Amazon.com, Inc. (NASDAQ:AMZN) valued at $48.02 billion. This compares to 279 positions in the fourth quarter of 2021 with $49.16 billion in stakes.
During the second quarter of 2022, Locust Wood Capital Advisers increased its stake in Amazon.com, Inc. (NASDAQ:AMZN) by 1,261% to $34.24 million. As of June 30, Locust Wood Capital Advisers is the Company's majority shareholder.
Oakmark Funds, an investment management company, mentioned Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2022 Oakmark Select Fund investor letter. Here's what the firm said:
“Amazon (NASDAQ:AMZN) is the world's leading e-commerce and cloud computing provider. Two-thirds of US households are Amazon Prime subscribers, and over half of all online product searches now start on Amazon. We believe the company's strong customer loyalty and massive infrastructure present significant barriers to entry into a growing e-commerce market. Regardless, Amazon Web Services ("AWS") controls nearly half of the cloud computing market. We believe that AWS has become utility-like in nature and scope, and we anticipate healthy growth going forward as IT workloads continue to move to the cloud. More recently, concerns about rising capital spending have weighed on the stock -- as they have in times past -- giving us another opportunity to buy shares at a very attractive price. At our purchase price and AWS' valuation in relation to its competitors, an investor is not paying much for the immensely valuable e-commerce franchise.”
7. Pioneer Natural Resources Company (NYSE:PXD)
Number of hedge fund holders: 54
Pioneer Natural Resources Company (NYSE:PXD) is an independent oil and gas exploration and production company in the United States. Jim Cramer recommends Pioneer Natural Resources Company (NYSE:PXD) for a moderate recession as it is a high-yield stock. As of July 29, Pioneer Natural Resources Company (NYSE:PXD) has a trailing 12-month PE ratio of 14.10 and offers an expected dividend yield of 5.45%, which the company is able to generate from its free cash flow of $4.64 billion. dollars supported.
Pioneer Natural Resources Company (NYSE:PXD) is also a top pick for energy stocks by Goldman Sachs analysts. Goldman Sachs analysts noted that Pioneer Natural Resources Company (NYSE:PXD) has outperformed its peers. They expect the company to declare a dividend of $8.24 per share, which would bring its annual dividend yield to about 15%.
On July 26, Raymond James analyst John Freeman reiterated his "strong buy" recommendation for Pioneer Natural Resources Company (NYSE:PXD) and revised his price target on the stock to $315 from $375. Freeman noted that the company's model suggests a 13% dividend yield for 2023.
At the end of the first quarter of 2022, 54 hedge funds were bullish on Pioneer Natural Resources Company (NYSE:PXD). These funds held combined holdings of $1.04 billion, up from $1.01 billion in the previous quarter when 43 hedge funds held shares in the company. Hedge fund sentiment for the stock is positive.
As of March 31, Abrams Bison Investments owns over 0.59 million shares of Pioneer Natural Resources Company (NYSE:PXD) and is the company's largest shareholder. Fund shares are valued at $149.51 million.
Carillon Tower Advisers named several stocks in their "Carillon Scout Mid Cap Fund" investor letter for the first quarter of 2022, and Pioneer Natural Resources Company (NYSE:PXD) was one of them. Here's what the company said:
“Pioneer Natural Resources (NYSE:PXD) has performed well in a strong energy sector. Pioneer recently stood out with a promise to return much of its free cash flow to shareholders through dividends and share buybacks, and ended hedging to give shareholders more earnings and dividend potential if oil and gas prices continue to rise.”
6. Dollar General Corporation (NYSE:DG)
Number of hedge fund holders: 53
Discount retailers like Dollar General Corporation (NYSE:DG) are also among Jim Cramer's stock picks for a modest downturn, as these businesses are seeing strong selling volumes during tough economic times. As of July 29, Dollar General Corporation (NYSE:DG) has a forward dividend yield of 0.90%, which it supports with trailing twelve-month free cash flow of $1.53 billion.
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