A portfolio of Cramer’s top picks is up 50% since he created it, he told viewers on Thursday.
For last year’s “It’s a Family Affair” show, he pulled together a diversified group of five stocks that were perfect for any kid who wanted to start investing: Apple , Disney , Hasbro , McDonald’s and VF Corp . Their performance has far outshined the S&P 500, which is up just 17% over the same period.
Well, 12 months later and all of them are still buys – except VF Corp., that is. The stock delivered a 28% gain, but Cramer doubts the company’s brands – Vans, North Face – are as recognizable as Nike . And VFC gets 30% of its sales from Europe, and its exposure to the euro is “a major risk,” he said.
Nike, meanwhile, may get a similar amount of its revenues from the Continental, but that business risk is offset by great exposure to China and the emerging markets. Plus, while some viewed Nike’s most recent quarter as disappointing, there were some numbers within it that are worth noting, namely future orders and inventory levels.
Future orders is a Nike program that allows retailers to order merchandise five to six months in advance, and it’s usually a great predictor of how the company will perform going forward. And future orders this past quarter jumped 10%, 2% more than analysts were expecting.
Not to mention, inventory was down 13% for the quarter, meaning Nike won’t have to cut prices to unload its product. The company also saw a 49% increase in its cash position. Then there’s also the fact that Nike’s a part of Cramer’s beloved shoe bull market, giving investors another reason to like the stock.
So hold on to Apple, Disney, Hasbro and McDonald’s, but switch out of VF Corp. for Nike.
“Remember, we want children to learn to invest while they have their whole lives ahead of them,” Cramer said. “This portfolio might be perfect for those trying to put together a diversified collection of stocks known by every child worldwide.”
When this story published, Cramer’s charitable trust owned Apple.
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