Kraft Heinz Co (NASDAQ:KHC) ranks 3rd in our list of the 7 Stocks Jim Cramer Recommends Investors to Stay Away From.
Since the company is a famous name among both retail and institutional investors, it deserves a separate look.
Jim Cramer in a latest program yet again lamented over the market’s obsession about the Fed’s stance over sticky inflation, saying the latest Fed minutes from April 30 to May 1 spooked investors because the central bank officials seem to be getting “impatient” with the inflation’s slower-than-expected decline.
However, Cramer said that economic data released after these Fed minutes showed that the labor market as well as inflation are cooling, exactly what the Fed wants. Cramer said had the Fed officials seen this data before, their minutes would have been different.
Cramer said that the Fed needs to know that their “inflation lamentation” from three weeks ago isn’t necessary.
Jim Cramer said that consumer spending has been the biggest issue for the Federal Reserve as they wonder, “is they any place that’s too high for them (consumers).” Cramer acknowledged that without putting brakes on consumer spending it’d be impossible to beat inflation.
Cramer Thinks Fed is Winning Battle Against Inflation
However, the CNBC host said that if Fed officials had paid attention they’d have found that they are “finally” winning their battle against consumer spending too.
Jim Cramer said there are “nascent signs” showing that the consumers are finally saying “enough is enough.” Cramer pointed to Walmart’s latest numbers as a sign of consumers’ preference for discount retailers. Cramer said Walmart is one of the few companies offering value in budget.
“After years of seemingly endless price increases, the consumer has had enough. Consumers are now staying more at home.”
Jim Cramer also highlighted latest comments from Kevin Hourican, the CEO of Sysco, which supplies food products to restaurants. Hourican said that the industry needs to do “something” about the rising prices that are affecting foot traffic at restaurants.
Jim Cramer thinks a “consumer rebellion” is happening in the industry which has executives scratching their heads.
Another sign of this rebellion, according to Cramer, is major companies like McDonald’s Corp (NYSE:MCD) rolling out budget options. Cramer said that consumers also has had enough of price increases at McDonald’s Corp (NYSE:MCD), and the company needed these budget menu offerings to increase traffic.
Kraft Heinz Co (NASDAQ:KHC)
Number of Hedge Fund Investors: 43
Illinois-based food company Kraft Heinz Co (NASDAQ:KHC) is one of the stocks Jim Cramer is bearish on these days. When asked about the stock in a latest program, Cramer said that Kraft Heinz Co (NASDAQ:KHC) is one of the “storied” brands and this kind of brands don’t make a lot of money because they are not considered “fresh” by Wall Street. Cramer said a lot of products developed by Kraft Heinz Co (NASDAQ:KHC) are not that “important” which is why he isn’t recommending the stock “in ages.”
Piper Sandler disagrees with Jim Cramer. Earlier this month the firm upgraded Kraft Heinz Co (NASDAQ:KHC) to Overweight from Neutral. Piper Sandler said Kraft’s food services business now has better visibility amid innovation in time-saving and labor-saving dispensers. Piper Sandler analyst Michael Lavery said Kraft Heinz Co’s (NASDAQ:KHC) food services business growth could accelerate by 2025. The analyst also likes the stock’s valuation and thinks Kraft Heinz Co’s (NASDAQ:KHC) FCF can offset downside risks.
Insider Monkey’s database of 933 hedge funds shows that 43 hedge funds reported owning stakes in Kraft Heinz Co (NASDAQ:KHC) as of the end of the first quarter of 2024. The biggest stakeholder of Kraft Heinz Co (NASDAQ:KHC) is Warren Buffett’s Berkshire Hathaway which has a $12 billion stake in Kraft Heinz Co (NASDAQ:KHC).
Kraft Heinz Co (NASDAQ:KHC) ranks 3rd in our list of the 7 Stocks Jim Cramer is Bearish On.
Click to see Jim Cramer Says You Should Stay Away from These 7 Stocks.
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Disclosure: None. This article is originally published at Insider Monkey.
