We recently compiled a list of the 12 Stocks on Jim Cramer’s Radar. In this article, we are going to take a look at where e.l.f. Beauty, Inc. (NYSE:ELF) stands against the other stocks on Jim Cramer’s radar.
On Monday, Jim Cramer, host of Mad Money, offered his thoughts on the market’s response to President Trump’s tariffs news. He recalled how, during the presidential campaign, Trump had promised to impose tariffs on several countries, including China. Cramer expressed his surprise that people seemed to have convinced themselves otherwise, considering the president’s long-standing position on the matter.
Cramer highlighted one aspect of the tariffs that took him by surprise in a more positive light. He had expected that China would bear the brunt of the tariffs, with Canada receiving the lowest impact due to its strong relationship with the U.S. However, the 25% duty on Canadian goods struck Cramer as unexpected, especially given that there was not a significant issue like fentanyl or migration at the Canadian border.
“It seemed relatively innocent as far as trade policy goes, but President Trump said over and over again that Canada was taking advantage of us. So they got hit.”
READ ALSO: Jim Cramer On 9 Stocks That Are Rallying Despite Tariff Worries and Jim Cramer Recently Talked About These 11 S&P 500 Stocks
Cramer then drew attention to Claudia Sheinbaum, the president of Mexico. According to Cramer, Sheinbaum had a clear understanding of the situation. She recognized that Trump was going to shift the rules, and she knew he had the upper hand in the negotiation and understood his goals of curbing illegal immigration and fentanyl trafficking. Sheinbaum understood that a trade war with the U.S. would not be in Mexico’s interest, so she was prepared to adapt and engage with Trump accordingly. Cramer added:
“I think the Chinese will see the 10% number go higher if they recalcitrate. To me, this one’s obvious. The president told me there could be some good news with China when I interviewed him on the floor of the exchange after the election. I have no idea why he went so easy on the Chinese, but it’s possible that he might want to try to extend an olive branch to China, at least to start.”
By starting with the lower tariff, Cramer noted, Trump left himself significant room to maneuver in the future. If he had begun with a 25% tariff, he would have had less flexibility in dealing with China. Now, with more space to negotiate, Cramer believes China recognizes it is receiving a favorable deal.
Our Methodology
For this article, we compiled a list of 12 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on February 3. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
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).
A close up of the lip and eye products from the company on a model in a fashion and beauty shoot.
e.l.f. Beauty, Inc. (NYSE:ELF)
Number of Hedge Fund Holders: 40
A caller mentioned e.l.f. Beauty, Inc. (NYSE:ELF) stock inching down recently amid concerns about tariffs on China and Cramer replied:
“Yeah, well it’s gonna report… They make this stuff in China is real bad and it’s gonna hurt the profit margin and we got to hear what they’re gonna have to say. I have to tell you, I’m very uncomfortable buying something that is all sourced in China given the fact that we don’t know what the president’s going to do if China doesn’t play ball.”
e.l.f. Beauty (NYSE:ELF) is a well-known company in the cosmetics sector, offering a wide variety of beauty and skincare products across multiple brands, such as e.l.f. Cosmetics, e.l.f. Skin, Well People, Naturium, and Keys Soulcare. Previously, Cramer noted the stock’s decline in October 2024 as he remarked:
“Well, remember, this is a very tough situation because all of cosmetics are in a downturn that is so staggering that it caught everybody by surprise, especially Fabrizio Freda at Estee Lauder. I think Estee Lauder is not as good as E.l.f, but I recognize that this group is in the doldrums. I don’t want to make a single call on a group decline. I do think that when they come back, this one will come back faster than all of them.”
Since then, e.l.f. Beauty (NYSE:ELF) stock is down over 18%.
Overall ELF ranks 4th on our list of the stocks on Jim Cramer’s radar. While we acknowledge the potential of ELF as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ELF but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article was originally published at Insider Monkey.