CNBC’s Jim Cramer on Tuesday revisited his 11-stock “Go” list of return-to-normalcy plays, recommending that a handful of names in the basket continue to present buying opportunities.
“Other than Mastercard and 3M, our Go stocks have been fabulous performers since we found out about the vaccine in November. Some of them have gotten a little rich,” he said on “Mad Money,” “but the rest of the list is actually still worth buying.”
“With the way our government’s been bungling the vaccine rollout, you better believe this list will get another leg higher once the pandemic’s finally under control.”
Of the 11 companies on the list, Cramer concludes more than half remain at attractive levels for investors to pick at, despite their double-digit gains since the list was compiled last summer. Cramer noted that the group of equities is up 36% since he presented the list in early August, compared to the roughly 14% gains in the S&P 500 and Dow Jones. The Nasdaq Composite has rallied more than 18% in that same time frame.
“On average, the Go list has trounced the major indices,” he said. “However, when you zoom in on the individual names, some have worked a lot better than others.”
“I think the ones that are working have more upside as Americans get vaccinated and a new president gets sworn in with, I think, a more serious federal Covid plan.”
The Go list index includes companies from the chemical, entertainment, financial, apparel and railroad industries that Cramer expects will improve output as coronavirus vaccines become widespread and the economy recovers and returns to some sense of normalcy after a daunting 2020.
Of the 11 companies he expects will show impressive year-over-year comparisons over the next 12 months, Union Pacific, Emerson Electric, Nucor, PPG Industries, Ralph Lauren and PVH have more room to run, based on Cramer’s outlook.
Union Pacific, which is set to report fourth-quarter earnings on Thursday, saw revenue fall almost 13% through the first nine months of 2020 when compared to the year prior, but its shares rose 15% for the year. Since August, the stock is up 22%.
Nucor saw business fall nearly 15% in that same January to September period, posting a 5% decline in its share price for the year. The stock is up 29% since August.
Emerson Electric’s revenue dropped 11% year over year between January and September, but shares rose above 5% for the full year. Since August, the stock is up 29%.
After revenue declined more than 12% in the first three quarters of 2020, shares of PPG finished the year in the black with a gain of 8%. The stock has improved 31% since August.
In the same pandemic-affected quarters, clothing companies Ralph Lauren and PVH both saw sales decline by more than 30% from January to September. Their stocks were both down about 11% in 2020, but have surged about 56% and 90%, respectively, since Cramer compiled his Go list.
“Between the banks coming back to life and all these fast-growing new financial technology IPOs, there’s less of a constituency for owning a stock like Mastercard. I misjudged that,” Cramer said. “I think Mastercard’s a great company, but Wall Street’s just not interested at the moment. Maybe when cross border travel comes back, it will take off.”
He did, however, issue a more promising forecast of 3M in the near term.
“3M has some serious legacy issues — I included this one on the list because I thought management would be able to get past them,” he said. “3M reports next Tuesday and they did pretty darned well last time. I think the good numbers will continue.”