Game Plan: Mining the S&P 500
Instead of giving viewers the usual plan for the upcoming week, Cramer decided to let them in on his thinking, his strategy for finding the stocks that could work in this market. While it may be easier just to give Homegamers a list of names to buy, he figured it would be better to teach them how he pulls that list together.
Cramer’s daily ritual recently has been to dig through the S&P 500 for companies whose dividend yields are up thanks to a volatile market that has pushed down their stocks. These stocks are the accidental high-yielders he’s been talking about. They make good investments in this environment because those payouts attract buyers, buoying the share price before it gets too low.
So who are the standout picks? Analog Devices and Intel in the semiconductor space are worth a look. So, too, is Kimberly-Clark . While not the best-managed company, KMB is paying 4% and lower oil prices should ease pressure from raw costs.
Cramer likes Kraft , another company that should benefit from lower costs now that food prices have come down. In a tough economy, consumers will reach for mac-and-cheese rather than dine out. So this stock could work.
Duke Energy has been a Mad Money fave for a while now, and new to the list are industrial names Emerson and Ingersoll-Rand, both with 4% yields. Ingersoll’s become a less cyclical business, while Emerson has its hand in so many industries that it might hold up better than most of its peers in this economy.
Think you can find better stocks than Cramer? Now that you know how he does it, come up with your own Game Plan.
Jim’s charitable trust owns Kraft Foods.
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