Cramer's F.A.D.S. C.A.N.

Cramer: 7 Stocks the Hedge Funds Will Be After

Published: Tuesday, 23 Nov 2010 | 7:12 PM ET Text Size

By: Drew Sandholm

Despite stocks ending sharply lower Tuesday, Cramer told investors not to give up. After all, he said the mechanics of this market are on your side.

As we head into the final six weeks of the year, the S&P 500 index remains up 6 percent year-to-date and the fundamentals remain strong. Typically, hedge fund managers would lock in gains by taking profits at the end of the year. This year, however, many money managers are trailing the gains because they were more focused on macro-economic concerns than how individual companies were performing. Desperate to close the performance gap versus the averages, they are piling into momentum names with high-growth, like Cramer's F.A.D.S. C.A.N.:

F5 Networks [FFIV 142.65 -0.04 (-0.03%)

Apple [AAPL 341.64 -0.815 (-0.24%)

Deckers [DECK 79.06 -1.38 (-1.72%)

Salesforce.com [CRM 141.12 -1.52 (-1.07%)

Chipotle [CMG 220.79 -2.88 (-1.29%)

Amazon.com [AMZN 184.34 -0.34 (-0.18%)

Netflix [NFLX 186.65 -1.23 (-0.65%)

Since Nov. 2, the F.A.D.S. C.A.N. stocks are up an average of 11 percent versus a 1 percent decline in the S&P over the same period. Despite the bad tape on Tuesday, DECK, CRM and CMG all hit 52-week highs.

"With so many money managers lagging the benchmarks because they didn't manage their portfolios well, the big boys are going to have to chase momentum going into the end of the year," Cramer said. "That's one more reason to buy the F.A.D.S. C.A.N. names."