We recently published a list of Jim Cramer’s Latest Calls: 10 Stocks to Buy and Sell Now. Since Kroger Co (NYSE:KR) ranks 9th on the list, it deserves a deeper look.
Jim Cramer in a recent program on CNBC yet again talked about the importance of investing in individual stocks and said with discipline and patience beginner investors can beat the market by picking solid stocks with strong fundamentals.
“If you are willing to put in the work, regular people can trounce the averages as long as you are disciplined and you follow the rules,” Cramer said.
Talking about his stock-picking process, Cramer said that he likes to “start” hunting for stocks by going through the list of stocks making new highs. This is a good start, according to Cramer, because a lot of times momentum keeps pushing the same stocks higher and higher unless something fundamentally changes. Cramer said he does not recommend buying stocks when they are trading at new highs. Instead, he waits for a pullback.
“New high list is not a shopping list it’s an inspirational list. You keep an eye on those names and then wait for them to come down before you pull the trigger,” Cramer said.
Cramer said that you should only pile into stocks on a pullback if you believe they will rebound for reasons “unrelated to the broader market.”
For this article, we picked 10 key stocks Jim Cramer is talking about during his programs these days. With each stock, we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Kroger Co (NYSE:KR)
Number of Hedge Fund Investors: 46
Jim Cramer said Kroger Co (NYSE:KR) posted a strong quarterly report but the Albertsons deal is weighing on the stock.
“With Albertsons deal still languishing I think it puts a lid on the stock, that’s unfortunate because I like it very much,” Cramer said.
In another program, Cramer said:
“Kroger Co (NYSE:KR) confounded the critics by developing a superior loyalty program, regionalizing their storage and creating the best store brand private label products out there.”
Cramer also highlighted a comment from the CEO made during the latest earnings call:
“Budget-conscious customers are buying more at the beginning of the month to stock up on essential items and groceries.
And then as the month progresses, they are more cautious with their spending. In response, we are supporting our customers by keeping prices low through promotions, including loyalty discounts, personalized offers and fuel rewards. We are also expanding our multi-tiered portfolio of Our Brands products, which provides customers exceptional alternatives to national brands competing on quality, while at a noticeable lower price point. Our long term model demonstrates that by consistently keeping prices low, we increase customer loyalty and grow share of wallet. While the food-at-home industry remains competitive, our model drives efficiencies that allow us to sustainably invest in value and maintain competitive price spreads with key competitors.
Read the full earnings call transcript here.
Kroger Co (NYSE:KR) reported quarterly sales of $33.91 billion, a modest 0.2% rise from the $33.85 billion posted in the same quarter last year. The figure also surpassed analyst expectations by $207 million.
Kroger Co (NYSE:KR) said there was a 17% surge in delivery sales, driven by the company’s Customer Fulfillment Centers, with its online grocery customer base growing 14%. Kroger’s digital sales strategy, once unexpected in the grocery sector, has gained traction. While data isn’t available, the launch of 223 new Our Brands products likely boosted revenue during the quarter.
Overall, Kroger Co (NYSE:KR) ranks 9th on Insider Monkey’s list titled Jim Cramer’s Latest Calls: 10 Stocks to Buy and Sell Now. While we acknowledge the potential of Kroger Co (NYSE:KR), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than KR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.