CNBC’s Jim Cramer on Wednesday highlighted expertise and actual property shares he believes can carry out nicely in 2023, following a dismal yr for each sectors.
Rising rates of interest introduced challenges for tech and actual property industries in 2022. Info expertise is down 27% yr up to now, as of Wednesday’s shut, whereas actual property has fallen 28.4% over the identical stretch. The one S&P 500 sectors to carry out worse are shopper discretionary, down 36.2%, and communication companies, down 40.3%.
Cramer mentioned he believes tech and actual property will proceed to wrestle subsequent yr; nevertheless, tech might begin to see its fortunes enhance after the primary half of 2023.
Tech picks for 2023
Oracle’s fiscal 2023 second-quarter earnings final week had been “magnificent,” Cramer mentioned. The inventory sells for lower than 17 instances ahead earnings. Whereas enterprise software program is hardly Cramer’s favourite trade proper now, he mentioned Oracle’s enterprise seems “very sturdy.”
Cramer mentioned he likes Broadcom’s diversification technique, together with its pending deal to accumulate VMware. Broadcom shares additionally carry a dividend yield round 3.3%, permitting traders to be affected person whereas that acquisition goes by way of regulatory assessment, he mentioned. The corporate additionally lately introduced a $10 billion inventory buyback program.
Palo Alto Networks isn’t within the S&P 500. Nonetheless, Cramer mentioned he believes it is the best-run cybersecurity firm working in an trade that has long-term endurance within the digital age. Whereas Palo Alto Networks reported better-than-expected outcomes final month, Cramer famous the inventory is not too far-off from its 52-week closing low of $142.21 on Nov. 4. “I like to recommend choosing some up now proper right here and possibly some extra into weak spot,” he mentioned.
Actual property picks for 2023
Cramer mentioned he likes Realty Earnings as a result of its high retail tenants — equivalent to Greenback Common, Walgreens and 7-Eleven — have companies that may maintain up throughout a possible recession. “Better of all, this firm’s a dividend machine; they pay a month-to-month dividend,” he mentioned, “and have a tendency to boost it a number of instances a yr. Presently, the inventory yields 4.6%.”
Whereas shares of Federal Realty have fallen round 25% in 2022, Cramer mentioned the inventory has been a stable long-term performer. Its present dividend yield is 4.25%. Cramer mentioned Federal Realty’s focuses on mixed-use properties, lots of that are in rich suburbs. That’s notable given considerations round a possible recession.
Cramer mentioned the logistics centered actual property funding belief, or REIT, has continued to show in sturdy outcomes whilst its inventory has fallen round 31% yr up to now. Cramer mentioned he thinks Prologis shares have tumbled far sufficient to begin wanting attractive.