This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stock Under $10 that he thinks could potentially double or triple in the next 6 to 12-months. See what he's trading today with a 14-day FREE pass.

Jim Cramer: How the Dow Will Fare in 2014, Part 1

Stocks in this article: TWTRAXPTVZBACAT

7. Coca-Cola (KO). This company is going to do something big this year. It has to. Both diet and regular carbonated soft drinks are declining at a pace that is alarming and shocking. We could be seeing the beginning of the tobacco-izing of this industry, and that doesn't lend itself to Coca-Cola's 20x multiple. The sub-3% dividend yield doesn't do much for me, either. But a big restructuring, coupled with a change in management and a possible acquisition to get it less dependent on carbonated drinks, sure would help. This is a very challenged company and, again, if Warren Buffett were to let some go, it could easily trade to $35. With restructuring, I am expecting I think we could see the stock reach $45. It's ironic -- what is saving Pepsico (PEP) from a similar debacle is its Frito Lay division. It, too, is struggling with carbonated soft drinks, but snacks remains a very viable growth business.

8. Disney (DIS). When Disney reported last, there was almost universal opprobrium for the company. It drove me crazy, because I thought it was a darned good quarter with excellent ESPN numbers -- the key metric -- as well as decent box office and excellent theme parks. Since then things have only gotten better as gasoline has gone down, as the consumer has vacationed more and as ESPN rates have held steady to higher.

But here is the real kicker for this company: With a stock that has rallied almost 50%, the Star Wars franchise is now on the horizon. Not only do I expect even fewer non-traditional Marvel/Disney movies, but I think the hype over the new Star Wars movie will be rife at this time next year. Companies like Disney are going to get much higher price-to-earnings ratios as we see that earnings aren't going down when rates go higher. As a result, I can see this stock going to $83 without much trouble, meaning a 20x multiple on next year's probable earnings.

9. DuPont (DD). This year we are going to see what a noncommoditized DuPont is made of, and I bet it is made of some pretty darned good numbers. When Ellen Kullman broke the news that she would be spinning out the company's Ti02 division, I was thrilled. Because, next to uncoated free sheet paper, fertilizer and corrugated container board, not much offers less added value than a chemical whitener company. Without this division, we should see immediate multiple expansion at DuPont, and I think the new company could earn $4 per share. That would send Dupont's stock to $80.

I believe DuPont will be one of the best-performing stocks in the index. This new DuPont is loaded with fast-growing specialty chemicals and biotech-bred agricultural products. Plus, Kullman's committed to the dividend. The stock has risen nicely since the announcement, but I think there'll be much more to be had when the spinoff is consummated.

10. Exxon Mobil. This will be the year when Exxon will get to have a multiple that might even be at a premium to the average stock in the S&P. That means it could trade to $128, and it will be one of the best performers in the Dow. Such is the power of a Warren Buffett, that he can convey higher-multiple status on a company that has slow-growing but consistent earnings and the kind of monster share buyback that he so covets.

I think that Exxon, after multiple years -- not quarters, but years -- of being just kind of an oil bank with very little production growth and replacement activity, is now seeing paydirt on its myriad projects and is going to grow consistently in a fashion that will make the other major oil companies jealous. This is Exxon's time, and it is now a very easy stock to own. So it will be bid up exorbitantly, as all darlings are.

Stay tuned later on today for my next two batches of Dow predictions.

At the time of publication,, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long AXP, CAT and OXY.

Editor's Note: This article was originally published at 8:30 a.m. EST on Real Money on Dec. 24.



Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV

Markets

DOW 17,814.94 -2.96 -0.02%
S&P 500 2,067.03 -2.38 -0.12%
NASDAQ 4,758.2520 +3.36 0.07%

Our Tweets

Brokerage Partners

Top Rated Stocks Top Rated Funds Top Rated ETFs