There are a few similarities between the stocks that Jim Cramer likes and the companies that Warren Buffett currently owns. If you don’t know who Jim Cramer is, he is a host at CNBC and he has his own show revolved around the stock market called Mad Money. Although Jim is not technically allowed to trade for himself due to his contractual obligation, he does have a charitable trust which he regularly purchases stocks for as a way to benefit charity.
After reviewing Warren Buffett’s portfolio, and Jim Cramer’s charitable trust, we noticed that there are some stocks that they both happen to own. Let’s take a look at those stocks now so you can get a good idea where these two market giants meet in thinking.
The first stock that I want to mention is Wells Fargo and Company, which Warren Buffett has been a fan of for quite some time now. Berkshire Hathaway actually owns 400 million shares of this company since the end of June. This is about a 4% increase in the stocks that Berkshire Hathaway has of Wells Fargo since they owned it, and now it is also their second largest position only under Coke.
It also appears that Jim Cramer believes in Wells Fargo as well. His trust owns shares in this bank, and even though they have a relatively high valuation right now, they have a stable balance sheet and a proprietary brand that makes them an interesting purchase. Since they only have a trailing multiple earnings of 11, as well as their 2.6 dividend yield, we think that this is an excellent stock to buy and this is especially true when you compare it to similar banking conglomerates like Citigroup and J.P. Morgan Chase. Just to make it known, Cramer’s charitable trust also owns 2700 shares of J.P. Morgan Chase Bank and this position is actually larger than is Wells Fargo position.
Kraft Foods is also another stock that both Jim Cramer and Berkshire Hathaway own together. Just to let you know though, Berkshire Hathaway actually pared back their stake in Kraft, although they still own a total of 59 million shares. Jim Cramer’s trust also owns shares of this stock, but it is only a total of 2700. It is believed that Kraft is a good defensive position in the consumer goods sector, because you want to keep a diversified portfolio and this is definitely a good place to be. They have a 2.8% dividend yield, even though the stock appears to be price kind of high with a trailing price-to-earnings ratio of 21. The revenue and margins actually declined this recent quarter when compared to the same quarter last year.
The final common stock that Jim Cramer and Warren Buffett both own is CVS Caremark Corporation. Although Berkshire did cut their position in the stock during the second quarter, and they still own a total of 5.3 million shares. Jim Cramer’s trust owns 2300 shares of this company, and at this time it trades at 16 times trailing earnings, and will benefit greatly from the growth in its industry since there is a much greater demand for pharmacy services as baby boomers continue to get older.
If you want to actually copy some of the moves that Jim Cramer and Warren Buffett are making, then I recommend you choose Wells Fargo over the other choices. Although CVS is definitely a good buy, it makes more sense that Wells Fargo is actually the better choice.