Jim Cramer Discussed 9 Stocks for This Week’s Game Plan

5. The Procter & Gamble Company (NYSE:PG)

Number of Hedge Fund Holders: 68

Talking about a major player in the consumer packaged goods industry, The Procter & Gamble Company (NYSE:PG), Cramer said:

“Wednesday we got some real firecrackers… We also get results from two household names, Procter & Gamble and Johnson & Johnson. I think Procter might struggle with the strong dollar in China while J&J still has to deal with talc asbestos lawsuits and the recent acquisition of Intra-Cellular for $14 billion, which could threaten its pristine credit rating. The market has turned against these kinds of stocks viciously. Too slow growing. I think you can put either way though and make good money just by reinvesting their juicy dividends.”

Cramer also recently discussed the reasons behind Procter & Gamble’s (NYSE:PG) recent stock decline, acknowledging that it’s a great company but noting some important factors contributing to its struggles. One major factor, according to Cramer, is the impact of rising long-term interest rates, which have been climbing ever since the Federal Reserve began cutting short-term rates.

Cramer explained that when interest rates spike, stocks like Procter & Gamble are often hit hard. He pointed out that while dividends are typically seen as a protective feature for such stocks, they become vulnerable when bond yields rise, as bonds become more attractive to investors. He added:

“… which brings me to the second reason this group has just been hammered. The dollar’s gotten too strong. These consumer packaged goods companies tend to be very big overseas… The consumer staples all trade together. If the dollar hurts a big international company like Procter & Gamble as it is, it’s gonna reverberate even into Clorox because they’re all in the same sector, and sector ETFs are like gravity. They pull all their subjects down, even the ones that shouldn’t.”

Cramer also highlighted another important challenge: pricing pressures. He noted that heavy discounts on consumer products and intense pricing competition are making it increasingly difficult for companies like Procter & Gamble to keep up.