Monday kicked off the start of the end of the year.
Now that the calendar has turned past the halfway mark of 2019, CNBC’s Jim Cramer reviewed the top five performers on both the Dow Jones Industrial Average and the broader S&P 500 indexes and projected where those stocks are headed.
“When I look at the top five best performers in the Dow and the S&P, I see a good group of stocks, most of which have more room to run. As we’ve seen over and over this year, stocks that are in motion tend to stay in motion,” the “Mad Money” host said. “Maybe they get knocked down by big-picture worries, but if you’ve got a high quality story … the odds are good the stocks going to get right back on track.”
Best of the Dow
- Microsoft’s shares ran up nearly 32% in the first half of 2019. Cramer called it the “one uncontroversial large-cap tech stock.” CEO Satya Nadella has steered the computer giant clear of regulator worries.
“Microsoft’s earnings haven’t been rising nearly as fast as its share price. That means much of the recent move was called, let’s say, multiple expansion,” he said. “That’s money managers paying more for the same set of earnings expectation. That said, Microsoft’s got it all … stick with it.”
- Shares of Visa have rallied nearly 31% in the first half. Cramer said the only thing that can put a dent in the financial tech stock surge is if the banks come back in style on Wall Street.
- American Express has risen right behind Visa with about a 29% increase. Cramer said its a cheaper stock and better buy than its counterpart.
“If you really want a credit card stock that’s expensive but growing fast, I would go with … Mastercard, as it’s got the best runway for growth, ” he said.
- Disney’s stock jumped nearly 27% in the first half, powered by its recently announced plans to roll out streaming services that CEO Bob Iger has said will pay off in 2024. Cramer said it’s “one of the most unbelievable moves I’ve ever seen in my career.”
“Disney has terrific programming, which is why I’m betting Disney+ will start breaking even, earlier. Maybe in 2022, maybe turn a profit in 2023. If you’re willing to focus on those out years, then this remains a fantastic story. But near-term, patience is required,” Cramer said.
- Cisco is up 26% in the fist six months of 2019. CEO Chuck Robbins transformed the company from a networking hardware play to a diversified business that’s also focused on software and cybersecurity, which has drawn some skeptics to cheapen the stock price, Cramer noted.
“I think it’s got more room to run. Don’t forget, Robbins saw the last round of tariffs coming and skedaddled out of China ahead of time. No estimate cuts there,” he said. “If the new trade détente holds, maybe that doesn’t matter, but if this deal goes off the rails … Cisco will be fine.”
Best of the S&P 500
While Coty and Xerox have been the top performers on the index, Cramer put the two stocks to the side for his rankings. Coty just received a huge write-down, he said, and Xerox should never had been down as much as it was in the fourth quarter.
- Cramer crowned Chipotle the best performer on the S&P, with the stock growing 68% so far in 2019. He called it a “spectacular turnaround story” under Brian Niccol’s direction.
“Niccol has breathed new life into the franchise, helping it recover from the health scares, although it doesn’t hurt that Americans have short memories for mass incidents of food poisoning,” he said.
- Advanced Micro Devices rallied 64% during the same period. Cramer applauded CEO Lisa Su for molding it into one of the best chipmakers for PC, gaming and data center after it played behind Intel for decades.
“In fact, AMD’s become more reliable than Intel,” he said. “I think it might be having the best quarter of all the semiconductor stocks.”
- Shares of Cadence Design have risen 62% in 2019. The host said it’s become a top subscription-based intelligent systems designer.
“I think this stock could have more upside,” Cramer said.
- Cramer-fave MSCI, which sells services to institutional investors, rallied nearly 62% in the first six months of 2019. It’s a play on the emerging markets — risky investments that money managers love to make — the host said.
“That’s why MSCI has become the star of the fintech space,” he said. “More room to run.”
- Cramer said Hess, which has climbed 57%, is likely up after speculation that it’s a takeover target like Anadarko.
“I think that’s very unlikely, though,” he said. “If you own Hess, maybe you want to ring the register.”
WATCH: Mapping the top Dow Jones and S&P 500 performers
Disclaimer: Cramer’s charitable trust owns shares of Cisco and Microsoft.
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