The S & P 500 is riding a four-week winning streak, and a positive finish Monday put the broad U.S. stock index up 17.2% since its lowest close of the year on June 16. While we cannot say for sure if that will prove to the bear market bottom, sentiment on Wall Street has undoubtedly improved after a brutal start to 2022. With that in mind, we wanted to see which stocks in Jim Cramer’s Charitable Trust, the portfolio we use for the Club, have seen the biggest gains since the June lows and inform members of the ones we would still buy here. Put another way, we’re trying to figure out which winners of the past two months have run too much and aren’t worth chasing. We screened the 32-stock portfolio and found eight companies that meet our parameters, which are: Outperformed the S & P 500 between June 16 and Monday’s close. Club maintains a 1 rating on the stock. Note: In all, exactly 50% of the Charitable Trust names have beaten the S & P 500 since June 16. However, we maintain 2 ratings on those other eight stocks, such as Microsoft (MSFT), Ford Motor (F) and Humana (HUM). That means we’d wait for pullbacks before adding to our position. Here’s the list of Club stocks that made the cut: 1. Apple Our biggest winner since June 16 is Apple (AAPL), nearly doubling the S & P 500′s gain over the past two months with its 33.2% advance. Our longtime mantra — own Apple, don’t trade it — continues to encapsulate our overall feelings on the iPhone maker. However, we think the stock currently trades at attractive levels to buy shares, especially for Club members who don’t own any yet. As with all of the names in this list, it would’ve been great if you had a crystal ball and bought Apple shares on June 16, but that’s not how this works. Apple shares are still down year to date, albeit slightly, and reports suggest Apple expects strong sales of the latest iPhone model that’s planned for a fall release. This helps strengthen our belief that, for longer-term investors, now is still an appropriate time to buy Apple. 2. Disney The second-best performer since June 16 with a 31.8% gain is Disney (DIS), which also happened to report a very impressive quarter last week that showed its theme park business is still booming and its hefty investments into digital video streaming are helping attract new subscribers. Disney’s lowest close of the past two months actually came July 14 at $91.84 per share. From that point to Monday’s close, the stock has surged 35.3%. We’ve struggled to understand why Disney’s stock became so hated by investors, which is why we bought shares three times in May and have at various times advocated for Club members to take advantage of the weakness. Even with these monster gains in recent weeks, Disney shares finished Monday’s session down roughly 20% year to date. While we’ve made our displeasure with the company’s balance sheet known , we continue to believe the value of Disney’s best-in-class entertainment franchises are not adequately reflected in the stock price. 3. Morgan Stanley Shares of Morgan Stanley (MS) rose 24.4% between June 16 and Monday, outperforming not only the recovering S & P 500 in that stretch but also the Invesco KBW Bank ETF (KBWB). We’ve written about why we’ve been willing to stick with our bank stocks despite the recession fears that have weighed on the group, and our reasoning for that decision is why we also see Morgan Stanley as a buy here (and why we bought shares in early July , for that matter). The Wall Street bank is developing a more stable, fee-based revenue stream thanks to the acquisitions of brokerage firm E-Trade and asset manager Eaton Vance, and we believe over time that transformation will be recognized and rewarded by the market. The company’s buyback program and dividend payout rewards investors for their patience. 4. Marvell Technology Chip stocks struggled mightily to start the year, so even with a 23.2% gain between June 16 and Monday, Marvell Technology (MRVL) is still down nearly 37% year to date. That helps explain why we believe Marvell is still worth buying despite its run in recent months. We understand the stock’s weakness this year — concerns about a slowing economy and a related downturn in semiconductor demand as well as the impact rising interest rates have on valuations — but nevertheless have viewed it as an opportunity to scoop up shares on the cheap (as we did July 7, buying 100 shares at roughly $45.07 apiece ). The reason is because our long-term thesis on Marvell is centered on the secular growth of data infrastructure end markets like cloud, 5G, and automotive. Those have held up better than the consumer-focused side of the chip market such as smartphones and laptops. Combine that with the fact the stock’s forward price-to-earnings ratio is still below its five-year average, and we think long-term investors should like Marvell shares here. 5. Advanced Micro Devices Our reasoning for viewing Advanced Micro Devices (AMD) as a buy is pretty similar to chip peer Marvell. Yes, AMD advanced 23.1% between June 16 and Monday’s close, but shares are still off about 30% for the year and our multi-year investment rationale remains intact. In the near term, AMD does have more exposure to consumer end markets than Marvell, but the company is growing market share in key parts of the PC landscape, which may help insulate AMD from the worst of the sales slowdown. Also, management’s most recent guidance update de-risked the PC business’ outlook for the rest of the year. Big picture, we own AMD for its push into the lucrative enterprise markets of data center and industries like aerospace and telecommunications. AMD’s quarterly results earlier this month underscored why we believe that strategy will pay off long term. 6. Nvidia Like Marvell and AMD, Nvidia (NVDA) is a beaten-up chip name that investors have returned to in recent weeks. Despite its 22% rebound between June 16 and Monday, Nvidia is still down about 35% in 2022. We think last week’s earnings preannouncement, in which the company warned second-quarter sales and adjusted gross margin would be well below Wall Street forecasts, could serve to reset investor expectations. After all, management attributed a lot of the blame to weakness in gaming, and many investors figured that to be the case. We remain long-term believers in Nvidia’s increasing focus on the data center, which was its largest revenue source in its fiscal first quarter, and its software-focused automotive business. We also think the work on its omniverse represents a revolutionary long-term play, although it’s still early innings. For that reason, we think a few years down the road Nvidia will be a more valuable company than it is today. All that said, if we could only add to two of the three semiconductor stocks on this list right now, we’d choose AMD and Marvell due to our concerns about the cyclicality of gaming and the uncertainty of how long the gaming glut will last. 7. Wells Fargo As with Morgan Stanley, our core thesis for Wells Fargo (WFC) hasn’t changed, so we think the bank’s shares are worth buying even after they rose 21.5% between the June bottom and Monday. Wells Fargo benefits from the higher interest rates stemming from the Federal Reserve’s policy tightening, and the bank’s multi-year internal expense reduction program should boost the bottom line. We recognize that recession fears may continue to make some investors cautious on the name. However, we think the bank’s capital position and quality loan book are healthy all things considered. While last month we lowered our WFC price target to $50 per share, we see the stock as worth buying at these levels. Even with the recent move higher, its forward earnings multiple of 9.8 remains below its five-year average of 12. 8. Costco The final 1-rated Club stock that’s beat the market since June 16 is Costco, which we consider to the best-run retailer around . Shares are now down only 4% year to date following their 20.8% gain between June bottom and Monday, possibly a sign that others in the market are realizing Costco’s value-focused ethos and profit-generating membership fees make it the right retail stock for this environment . We also happen to be believers in Costco in more normal operating environments — like when inflation isn’t scorching hot and supply chain snarls haven’t muddied the inventory waters for many retailers. We remain on the lookout for information related to two potential upside catalysts for the stock: 1) a possible membership fee increase and 2) a special dividend payout. (Jim Cramer’s Charitable Trust is long AAPL, DIS, MS, MRVL, AMD, NVDA, WFC and COST. 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. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.People walk outside of the New York Stock Exchange on July 25, 2022 in New York City.
The S&P 500 is riding a four-week winning streak, and a positive finish Monday put the broad US stock index up 17.2% since its lowest close of the year.
