CNBC’s Jim Cramer on Monday offered investors two stocks to consider adding to their portfolios.
Stocks in the materials sector tend to be very cyclical, which means they could suffer if the US Federal Reserve’s rate hikes push the economy into recession, he explained.
And while it’s far from the best-performing sector in the S&P 500, “even the weakest of these groups have some winners who have managed to buck the overall trend, and it’s important to find out if they do.” can continue as before [this year] in 2023,” Cramer said.
Here are his thoughts on his two stock picks:
Cramer recommended investors buy the seed and agrochemical company’s shares at its next retreat. He argues that strong crop prices this year have left farmers awash with cash and more likely to invest in efficient farming.
“Even though the stock is up 23% this year, it’s still selling for less than 19 times next year’s earnings estimates — far from expensive,” he said.
He called Nucor the “best steelmaker in America” and said he’s confident his stock will have a positive year in 2023 after demonstrating its ability to continue to post solid earnings results despite the Federal Reserve’s tightening publish. The company will also be a big beneficiary of the bipartisan infrastructure bill of over $1 trillion, Cramer predicted. Nucor’s shares are up over 15% year-to-date.
“Remember, a year ago analysts thought Nucor could make as little as $16 in 2022, and they ended up beating those estimates.