Stock Groups

Here’s a list of stocks you may want on your buying list

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Jim Cramer in CNBC’s Halftime Report.

Scott Mlyn | CNBC

This article was first sent to Jim Cramer’s CNBC Investing Club members. Get the latest updates directly to your email subscribe here.)

Although Monday may have seen a lot more negativity, prices are lower all over the place. However, we will continue to support the Charitable Trust by looking for opportunities to purchase stocks in certain areas.

The market’s uncertainties are no different to what has been experienced in the past. It’s been like this before. This is why we keep a well-balanced portfolio for Charitable Trust, as well as some cash, on hand.

This selloff can be difficult and never feels right. We are tested by the constant selling. However, if you think about the medium term you will see many great stocks that were wrongly punished or brought down by the sale everything mentality.

In our Investing Club note this morningOur members were advised to be careful and picky about what they buy. Here are some ideas and groups that you might consider for holiday shopping.

We continue to stress healthcare as a key group.. These stocks are strong and can increase earnings even during economic downturns. The potential blockage of Build Back better plan could have a positive impact on drug stocks, as one provision would have enabled the government to bargain directly with the pharmaceutical industry about the price of specific drugs.

  • We like the Portfolio Abbvie(ABBV), for its high dividend yield. I think that the market underestimates its potential to replace Humira Sales, however it’s a little harder to follow this trail after the notable outperformance of the last month.
  • We love Eli LillyMore information about (LLY), at the current market price. This stock is down about 6% since its post-Investor Meeting peak. We continue to like this pharma company for its volume-driven growth and blockbuster-rich pipeline. It also continues to expand its operating margins.
  • What about a company with an exit catalyst such as Bausch Health (BHC)? We said earlierIt looks great when you add up the parts.

Banks still hold value for usBecause of their low earnings they can be repurchased easily and have strong dividends.

  • These are our favorites Wells Fargo(WFC). Morgan Stanley (MS). Wells Fargo’s cost-cutting and asset cap make it a more compelling story, but they also offer great opportunities to earn higher interest rates. Morgan Stanley does not have an interest rate sensitive business model. Morgan Stanley is a fee-based business that generates recurring revenues streams. Because they can be predicted and predictable, investors are more willing to pay higher for fee-based or recurring revenue streams. The market is likely to reward MS as it becomes a majority of Morgan Stanley’s total revenues by imposing a higher price/earnings multiple.

Investors should not be asleep on megatech, we believe, the FANG stocks — Meta Platforms(FB), also known as Facebook Amazon (AMZN), Netflix (NFLX), and Google parent, Alphabet (GOOGL) — plus Apple(AAPL) Microsoft (MSFT). Each of these companies offers investors growth at a reasonable price. It also exposes you to some of most significant secular growth trends within tech. However, they are significantly cheaper than those tech stocks which earn nothing and remain volatile as Fed tightens or tapers.

  • Investors love to buy this group during uncertain times because of its strong management team and indestructible balance sheet. They are worth buying much earlier than you think. Amazon’s online market is the most successful beneficiary of the omicron surge that occurred before the holidays.

While oil might be going to the ground, Chevron‘s (CVX) 4.78% Dividend yield is a good thing for stockWith interest rates so low, it is easy to find support. We have already explained that Chevron’s capital and cost discipline means they can still generate enough cash to pay the dividend, regardless of lower oil prices.

Last, but not least: Costco (COST), The best consumer staple stock. The retailer has won in any Covid or non-Covid environment. It is not bothered by the wider economy, which is why everyone is attracted to low prices.

  • Investors should also be focused on the following catalysts in 2022. The first is the possibility of a cash special dividend. This is possible because Costco has a cash-rich balance and has already paid out special dividends four times over the last eight years.
  • Second, it seems likely that the management will raise its membership prices in the near future. Costco has increased the price of memberships every five years in the past. It will increase its cost next summer by five. Costco has strong loyalty rates, with a 91.6% renewal rate for the U.S.A. and Canada respectively, and 89% around the world. Costco is likely to increase its membership fee without much resistance. Fee income can be considered pure profit.

My Charitable Trust now has an official home at the CNBC Investing Club. You can view every portfolio move and receive my market insights before everyone else. Action Alerts Plus has ceased to be affiliated with my writings and the Charitable Trust.

 You will be notified by Jim Cramer if you subscribe to CNBC Investing Club. Jim may then make a trade. Jim will wait 45 minutes to send a trade alert, before purchasing or selling stock from his charitable trust portfolio. Jim may wait 72 hours to execute a trade if he has discussed a stock with CNBC TV. See here for the investing disclaimer.

(Jim Cramer’s Charitable Trust is long ABBV, LLY, BHC, WFC, MS, FB,  AMZN, GOOGL, APPL, MSFT, CVX and COST.)

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