We recently compiled a list of the Jim Cramer Discusses These 11 Stocks & Finds Few Reasons To Sell. In this article, we are going to take a look at where PepsiCo, Inc. (NASDAQ:PEP) stands against the other stocks.
In a recent appearance on CNBC’s Squawk on the Street, Jim Cramer commented on why the flagship S&P index remained stable despite multiple catalysts such as a trade war, DeepSeek, and a new administration. Cramer believes that “there’s still an undercurrent that the President is good for business.” He recalled how hedge fund billionaire David Tepper’s comments about the market were precarious and didn’t reflect the way it was behaving. Cramer outlined “I mean yesterday we had an individual talking about how the situation’s precarious on Squawk Box. And it’s not.”
Instead, Cramer shared “These are things where if you check the cadence of what happened, the President does something, it looks really, really harsh on Mexico. Claudia Sheinbaum comes back and says, you know what, I agree. Uh, the President does something it looks really harsh on Canada. And Canada comes back and says, let’s make a talk. Let’s do something. He does something that looks really harsh about China, it’s not harsh at all. So China then comes back, I mean these are all signs that the President’s strategy, I think people say, is working.” As a result, he wondered why there was any need to sell stocks. Replying to his question, Cramer pointed out “And the answer is why you would sell is because you don’t believe in the President. And you think that the President has got a strategy that doesn’t exist. I come back and say, well I don’t know. I mean there was a lot of success yesterday, so why sell?”
The CNBC TV host also commented on a JPMorgan note saying that policy shifts are moving towards business unfriendliness. Cramer holds a mixed opinion in this regard. On one hand, while he countered by wondering “how can it, look, deregulation is what businesses have been asking for. And they’re getting that in spade,” on the other hand he agreed that “Yes, did President Trump not do it in the order we wanted? Which would be first we get big tax cuts, we get deregulation. And then after that, you what we’re gonna hit them it [inaudible]. He went faster than that. And that was something that was perceived anti business.”
In fact, Cramer was surprised by the President’s China approach. He had “expected [a] sixty percent tariff on China. . . expected that the President would say listen, we will no longer import any steel from Mexico cause so much of it is from China. . . [and] thought that there would be tariffs on things that are necessary to China that would have made it horrible.”
Further commenting on the White House’s approach towards China, Cramer stated:
“If you’re China you’re saying, hey you know what, this guy really wants a deal with us. And let’s sit down. Now I remember when the President . . .he said look I think that things could be better with China. Now if you go back and read Peter Navarro’s book, about, when he talks about Trump and China. Oh man. There were people. . . Steve Mnuchin, who, he calls out, Navarro, as being China-poligists, and in a really harsh way, the book is. . . well written. And I just think that Navarro lost here, because these were not harsh.”
Our Methodology
To make our list of the stocks that Jim Cramer talked about, we listed down the stocks he mentioned during CNBC’s Squawk on the Street aired on February 4th.
For these stocks, we also mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds invest in? 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 a glass of a refreshing carbonated beverage illustrating the company’s different beverages.
PepsiCo, Inc. (NASDAQ:PEP)
Number of Hedge Fund Holders In Q3 2024: 58
PepsiCo, Inc. (NASDAQ:PEP) is one of the biggest carbonated beverages and snack companies in the world. Its shares have lost 14.7% over the past year as rising inflation coupled with high prices has dented the demand for its products. Cramer believes that the struggles that PepsiCo, Inc. (NASDAQ:PEP) is facing are also secular instead of being purely driven by high prices. The secular trend affecting the firm is increasing health awareness among younger consumers. Here are his remarks for PepsiCo, Inc. (NASDAQ:PEP) in detail:
“Yeah, Raymon Laguarta is doing a terrific job as CEO of Pepsi but the problem here is again, snacks. And snacks are part of either a healthy cohort, the change in people particularly younger people shifting to things that are better for you. Or it’s GLP-1 which I believe will ultimately have about forty million people on it between 12 and 13 months in persistence. We don’t know but Raymon thinks that it’s just, it’s the healthy, health is here to stay. And remember they have Frito Lays. And Frito Lay is historically salty snacks are not healthy. so they’re making smaller sizes, doing bake, they’re doing what they can, emphasizing Sabra, emphasizing a lot of different stuff that I think is good for you. But they don’t have enough that’s good for you. So, you’ll see the stock down. It’s obviously underperformed. And the question is, is it a real crisis in that they are producing food that may never be loved again. . . and we just think that the younger people don’t wanna snack the way they used.”
“Now Raymon I think can do a good job, it does yield 3.7, uh, it is historically a fantastic company as we know. It can reinvent. But it has to pivot so quickly because this is a trend, trend that came out of COVID. So COVID would come out and we’re snacking at home. And then we develop a whole new thesis about our bodies. And this is also in liquor. Liquor’s actually far worse. Diageo pulled its guidance this morning. But if you want to buy a high quality company and bet that they would figure what needs to be figured out, it is Pepsi.”
Overall PEP ranks 9th on our list of the stocks Jim Cramer recently discussed. While we acknowledge the potential of PEP as an investment, our conviction lies in the belief that some 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 PEP 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 is originally published at Insider Monkey.
