These 9 stocks are less impacted by the strong U.S. dollar and are well-liked on the Street

Published Mon, Sep 26 20224:47 PM EDTUpdated Mon, Sep 26 20224:53 PM EDT

Kevin Stankiewicz @in/kevinstankiewicz @kevin_stank

The British pound on Monday reached its lowest-level ever against the U.S. dollar, intensifying concerns about the strong greenback pinching the profits of American companies with large overseas exposure. It's been a steady worry on Wall Street in recent months that shows no signs of abating. When an American company has to convert international sales made in weaker currencies into U.S. dollars, their reported profits can suffer . "When we report a foreign company's earnings in U.S. dollars and the currency has gone down 10%, that's 10% less earnings that we report," Richard Galanti, the CFO of Club holding Costco , explained last week on its earnings call. While companies can use hedging strategies to minimize their foreign-exchange headwinds, in general those that mostly do business in the U.S. are better positioned to avoid significant currency challenges. This dynamic prompted us to find the companies in Jim Cramer's Charitable Trust, the portfolio we use for the Club, that have the least international sales exposure and are well-liked by Wall Street analysts. Our specific criteria for this screen are as follows: At least 70% of their sales in the last fiscal year came in the U.S., an indication that they could face less currency risk than companies that generate most of their revenues overseas. At least 50% of analysts rate the stock a buy, a sign Wall Street holds a generally favorable outlook on their prospects in the near-to-medium term. We found nine companies Monday that met the parameters, including the aforementioned Costco and some companies in defensive industries. To be sure, we don't think long-term, fundamental-based investors should only invest in a company based on foreign-exchange considerations. There is a lot more to it than that. However, with the British pound falling and the U.S. dollar setting a 20-year high against a basket of other foreign currencies, we think investors should be mindful of currency exposure — how some companies may get hurt and how others may escape the worst of it. This is especially true when considering that the latest earnings season is around the corner, starting in mid-October, and many management teams will likely talk about the challenges of the U.S. dollar. 1. Humana Percent of U.S. revenue: 100% Percent of analysts with a buy rating: 76% Humana (HUM) is a classic defensive name because health insurance is typically something people keeping paying for even when the economy slows. We called out its 100% domestic sales back in April , when we initiated our position in the company. That definitely works in its favor in a market colored by currency and geopolitical concerns. We have a 2 rating on the stock, meaning we'd wait for a pullback before buying, as the stock is only about 5% off its all-time high. 2. Wells Fargo Percent of U.S. revenue: 100% Percent of analysts with a buy rating: 53.6% Recession fears have weighed on bank stocks all year. It has hardly mattered that higher interest rates are great news for Wells Fargo's (WFC) net interest margin: the money it makes on the difference between what it charges for loans and earns on customer deposits. In a Sunday column to Club members, Cramer wrote that he's "about to turn very positive on the banks." The Club has a 1 rating on Wells Fargo, meaning we'd be buyers here. 3. Pioneer Natural Resources Percent of U.S. revenue: 100% Percent of analysts with a buy rating: 50% We were sellers of Pioneer Natural Resources (PXD) on multiple occasions in late August, sticking to our discipline to ensure energy didn't reach an excessive weighting in our portfolio. We still believe in owning some oil-and-gas names to hedge against inflation, and Pioneer's big dividend is another prong to the investment thesis. 4. Constellation Brands Percent of U.S. revenue: 97.3% Percent of analysts with a buy rating: 66.7% We see the owner of Corona, Modelo and Pacifico as well-positioned for this moment. The fact most of its revenues are in the U.S. helps, and we also believe beer sales will be relatively resilient in an economic slowdown. For what it's worth, Constellation Brands (STZ) has some peso-denominated costs because of its manufacturing operations in Mexico. But so far in 2022, the peso hasn't had a major move against the dollar. We have a 1 rating on the stock. 5. Disney Percent of U.S. revenue: 80.3% Percent of analysts with a buy rating: 72.4% The strength of Disney 's (DIS) business this year has not been reflected in its stock performance. Spending on experiences and travel — like a trip to Disney World — has remained strong even as inflation squeezes some consumer budgets. We rate the stock a 1 because, over the long term, we think Disney will become a considerably more valuable enterprise than the market's current assessment. The percentage of analysts who rate Disney a buy, at 72.4%, is second to only Humana on this list. 6. TJX Companies Percent of U.S. revenue: 79% Percent of analysts with a buy rating: 61.5% The newest stock in our portfolio, we think TJX Companies (TJX) is among the best retail stocks for this environment. The off-price retailer benefits from the inventory glut its peers are facing. While buying new clothes is largely a discretionary purchase, consumers who are looking for deals in a weaker economy know they can find them at TJ Maxx and Marshalls. 7. AbbVie Percent of U.S. revenue: 77.4% Percent of analysts with a buy rating: 54.2% AbbVie (ABBV) shares have held up well this year, as investors search out defensive-oriented names, a similar dynamic to what we described earlier with Humana. In the coming weeks, AbbVie management may provide more clarity on when it expects earnings to bottom out due to Humira's loss of exclusivity. That would remove some uncertainty and ultimately be a good thing for the stock as long as the trough is not deeper than what investors currently expect. We rate the stock a 2. 8. Morgan Stanley Percent of U.S. revenue: 74.6% Percent of analysts with a buy rating: 59.3% Morgan Stanley (MS) benefits from higher interest rates, but not nearly as much as Wells Fargo does. We have a 1 rating on Morgan Stanley, as we believe the stock is undervalued when considering the long-term potential of CEO James Gorman's diversification strategy. 9. Costco Percent of U.S. revenue: 72.2% Percent of analysts with a buy rating: 60.7% Shares of Costco (COST) fell more than 4% Friday, a day after the wholesale retailer reported what we regarded as solid fourth-quarter results . The stock is recovering some of those losses Monday, up over 2%. We maintain a 1 rating on Costco, believing any weakness in shares represent long-term buying opportunities. In the current moment, we think Costco's value-focused ethos will keep attracting customers who are looking for fair prices. Costco's large U.S. footprint is an added benefit. (Jim Cramer's Charitable Trust is long ABBV, COST, DIS, HUM, MS, PXD, STZ, TJX, WFC. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. 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Lucas Jackson | Reuters