Cramer’s Favorite Growth Stocks – A Second Look
At the beginning of the fourth quarter Jim Cramer put together a list of stocks he thought would garner a lot of attention from growth funds.
The thesis was that in the fourth quarter, growth oriented money managers lookat their best performers, and they double down on them going into the end ofthe year.
At the time Cramer recommended Amazon, Google, MasterCard, Visa, Ulta Salon,Tractor Supply, Sherwin-Williams, Diageo, Gilead and Alexion as his top tenanointed names.
In other words, Cramer thought they would outperform the rest of the marketthrough the end of the year.
Now that the new year is only a month away, it's time to review how theseanointed stocks have held up.
So, how have 'the anointed' names done since he first presented the thesis onthe October 8th broadcast of Mad Money?
First, Amazon started at $259, pulled back to just above $220, before rebounding to $251 where it is right now.
Cramer's Comments: These guys are taking share and taking names, plus, the company keeps expanding its hardware ecosystem with new versions of the Kindle. Also, they're trying to own the digital content business the same way they own traditional online shopping, and it's working.
Google has been pounded, it went from over $760 to below $660, but has now rebounded back to $695.
Cramer's Comments: "Google is still the sultan of search. Also Google owns Android, the largest mobile operating system in the world. They just need to figure out how to monetize it better, something the company is starting to do by releasing its own line of smartphones and tablets."
"Of all these growth stocks, though, I have to admit that I like Google lessthan I did before the bad quarter, so if you were trying to figure out which ofthese stocks worries me the most, it's Google."
MasterCard & Visa
MasterCard took a 25 point dive, falling from $475 to $450, but has since rallied up to $487, a dozen points above where Cramer recommended it.
Visa has moved up nicely from $136 to $148.
Cramer's Comments: "These two stocks are both plays on the worldwide switch from paper currency to plastic, as they make their money from transaction volumes. Visa and Mastercard both reported strong quarters in October, and they have very healthy balance sheets."
"I'm a big fan of both stocks."
Sherwin-Williams has had a bump ride, although it's ultimately moved up from$149 to $152.
Cramer's Comments: "This paint maker is a terrific play on the housing rebound, and that theme seems to be almost unstoppable. Plus, three weeks ago Sherwin-Williams agreed to acquire Comex, a Mexico-based paint company, for$2.34 billion, and this deal could be additive to the company's earnings within the first year."
"Also, raw material inflation has moderated, something that will be a real boonfor Sherwin Williams' margins early next year. This one's better than ever, particularly when you consider how muchdamage Sandy's done and how much square footage must be repainted because ofthat horrible storm."