We recently published a list of Jim Cramer is Talking About These 10 Stocks as Markets Rebound. Since Logitech International SA (NASDAQ:LOGI) ranks 9th on the list, it deserves a deeper look.
Jim Cramer in his latest program on CNBC talked about the latest rebound in the markets followed by a major selloff on Monday, saying we can “fret” about the interest rates, jobs market or mortgage rates, or we can just buy the stocks of “tremendous” companies and hold on to them.
“Stock prices have become so dependent on the macro, the carry trade, the Fed chatter, that it’s impossible to give you a pat answer even as I’ve told you over and over again that corporate America is doing much better than anyone would expect at this point in the cycle,” Cramer said.
Cramer lamented yet again that people believe a 25bps decline in interest rates could somehow “motivate” people to increase spending and on these hopes they often buy “phony” ETFs.
Cramer also said that the Fed won’t begin to cut rates until it sees consumers “rebelling” against higher prices forcing companies to roll back price increases to pre-COVID levels. Jim Cramer believes we now have an “empowered consumer” who is willing to make choices and choose options that are cheaper and better.” He said that during the pandemic, amid higher liquidity, people were willing to accept higher prices, but not anymore.
For this article we watched several latest programs of Jim Cramer and picked 10 stocks he’s talking about. 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).
Logitech International SA (NASDAQ:LOGI)
Number of Hedge Fund Investors: 20
When asked about Logitech, Cramer said that the company’s CEO Hanneke Faber is doing a “really good job.”
However, Cramer said that he’s not “as excited about the PCs yet.” Cramer believes LOGI could be a “Christmas play, not so much now.”
Logitech International SA (NASDAQ:LOGI) makes computer peripherals like headsets, mouse, keywords, etc. Analysts believe the company is expected to benefit following rate cuts as consumer discretionary spending will go up. The company recently posted strong fiscal first-quarter results and upped its full-year guidance for operating income and sales growth. During the quarter, gaming revenue was up 16% and keyboards & combos was up 19% year over year. The headset segment saw the strongest growth. The webcams category declined, but (NASDAQ:LOGI) remains the market leader. The company has also increased its market share across most categories.
LOGI is working hard to improve its efficiency and margins, with sales and marketing expenses down in the fiscal first quarter to 17% of total sales, a 30 bps decrease YoY. R&D expenses fell to 6.4% of sales, down 40 bps, and G&A expenses dropped by 60 bps to 3.1% of sales. Inventory turnover improved by 20%, and days of inventory were reduced by 10.
The biggest growth opportunity for the company is gaming. The peripherals market is expected to grow at a CAGR of about 9% through 2030. The company is launching products for the complete gaming experience, software included. It launched a slim keyboard combo for desktop work and three new products focused on gaming and livestreaming. The Mevo Core, a high-definition professional livestreaming camera, enables direct streaming to YouTube or Twitch. The company’s livestreaming tools now allow users to stream on TikTok without a direct stream key. The company also launched the “60 Percent Keyboard,” a compact gaming keyboard featuring “KEYCONTROL” technology for dynamic mouse movement in gaming competitions without sacrificing essential keys.
Overall, Logitech International SA (NASDAQ:LOGI) ranks 9th on Insider Monkey’s list titled Jim Cramer is Talking About These 10 Stocks as Markets Rebound. While we acknowledge the potential of Logitech International SA (NASDAQ:LOGI), 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 LOGI 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.
