CNBC’s Jim Cramer told investors why he thinks it might be a good time to invest in packaged good stocks that have been lagged as of late, naming companies including Procter & Gamble and Kimberly-Clark as undervalued winners in the sector.
“Right now, I’m concerned that we might be missing a bottom in a group of stocks that I haven’t particularly cared for at all, especially in a long time,” he said.
Wall Street has largely soured on the packaged goods group for a while, Cramer suggested, saying there has been too much inflation and not enough growth.
But inflation may be nearing a peak, Cramer said, which would drive consumer giants’ costs down. The Trump administration’s lenient attitude towards antitrust enforcement also makes it easier for companies to merge and dominate the industry, Cramer suggested.
Kimberly-Clark just announced it plans to buy Kenvue, Cramer noted, and he praised the latter’s brands even as Trump officials promote unproven theories that question the safety of Tylenol, one of its popular drugs. He lauded Procter & Gamble as an inventive company that has the size and scale to make products cheaper. Clorox, which is one of the worst performers in the S&P 500, also caught Cramer’s eye, and he said he likes its namesake cleaner as well as brands like Burt’s Bees, Hidden Valley and Brita. He added that investors willing to take on risk might want to buy General Mills — but only if they’re betting on a takeover, as the popularity of weight loss drugs is putting food stocks under pressure.
Cramer also said investors can look beyond traditional consumer packaged goods stocks and into pharmaceuticals, saying he expects big mergers in that industry. He named Johnson & Johnson and Amgen as solid picks.
There’s “too much opportunity to pass up,” Cramer said, “given that these are currently among the most hated companies in the universe.”
