We recently compiled a list of the Jim Cramer Recommends These 10 Stocks. In this article, we are going to take a look at where Sweetgreen Inc. (NYSE:SG) stands against the other stocks recommended by Jim Cramer.
In a recent episode of Squawk on the Street, Jim Cramer discussed how global markets have become more interconnected than ever. He compared this to 1987, when Japan’s influence on U.S. stocks was clear, with Japanese investors driving up prices in sectors like waste management and railroads. This connection between markets was strong then, and it’s even stronger now.
“Obviously, we went down on Japan, and we went up on Japan. This is somewhat reminiscent of 1987, when, if Japan was up, they’d come over and flood our markets. Sometimes they didn’t care; they’d just start buying stocks, often starting with waste management and Browning-Ferris. “
Cramer explained that the weakening dollar further enhances this global link, benefiting companies that sell internationally, such as Coca-Cola. He also observed a significant shift in investor behavior—where people once looked for reasons to stay out of the market, they now seem more inclined to stay in, finding optimism even in bad news. This change in attitude mirrors today’s market environment, where good news lifts stocks, and even bad news is met with hope for a recovery.
“Back in the day, you’d wonder why Browning-Ferris was up, and the answer would be, ‘Large buyer, large buyer, large buyer.’ Eventually, you’d go out for a beer, and it turns out it’s Tokyo. They loved the rails. There was such craziness back then, but now, we’re even more linked. And with the dollar continuing to weaken, it’s good that we’re linked for companies like that.”
Jim Cramer noted the irony of discussing September as a traditionally bad month for the market. He pointed out that when people focus too much on a specific month being negative, it often doesn’t turn out that way. Cramer also mentioned that despite this expectation, the market had been up significantly, making last week’s market behavior seem unusual.
“Well, it’s funny. You talked about September being a bad month last week, so maybe we get there in a roundabout way. I know that when you single out a month, that’s often when it doesn’t happen. But I also know that we’re up big, and last week seemed odd.”
Our Methodology
For this article, we reviewed a recent episode of Jim Cramer’s Squawk on the Street and his post on the key things to watch in the stock market for Monday. We selected ten stocks that he mentioned and included information on hedge fund sentiment for each. The stocks are ranked by the number of hedge funds that own them, from lowest to highest.
At Insider Monkey we are obsessed with 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 grinning customer being handed a gift card to enjoy their next meal.
Sweetgreen Inc. (NYSE:SG)
Number of Hedge Fund Investors: 27
Jim Cramer reports that Piper Sandler has downgraded Sweetgreen Inc. (NYSE:SG)’s stock from an overweight rating to a hold-equivalent rating. Despite Sweetgreen Inc. (NYSE:SG) being a popular stock on Wall Street recently, analysts now see less favorable risk versus reward at the current price of around $37 per share.
“Piper Sandler downgraded Sweetgreen to a hold-equivalent rating from overweight. The salad chain’s stock has been a Wall Street darling recently, but analysts told clients they believe there’s less favorable risk/reward at current prices around $37 a share.”
Sweetgreen Inc. (NYSE:SG) is strategically positioned for significant growth in the fast-casual salad and healthy eating sector. Sweetgreen Inc. (NYSE:SG)’s focus on fresh, locally sourced ingredients and its strong brand appeal to health-conscious consumers set it apart. Sweetgreen Inc. (NYSE:SG)’s rapid expansion into urban areas with high demand for quick and healthy dining options highlights its effective growth strategy.
Additionally, Sweetgreen Inc. (NYSE:SG)’s investment in digital innovations, such as a user-friendly mobile app and efficient delivery services, aligns with the growing trend of online ordering and food delivery. This combination of nutritious, plant-based offerings and advanced technology enhances customer experience and positions Sweetgreen Inc. (NYSE:SG) to capitalize on the rising demand for health-focused food. Recent financial results, including increased revenue and robust performance metrics, underscore Sweetgreen Inc. (NYSE:SG)’s positive growth trajectory.
Meridian Small Cap Growth Fund stated the following regarding Sweetgreen, Inc. (NYSE:SG) in its first quarter 2024 investor letter:
“Sweetgreen, Inc. (NYSE:SG) operates restaurants serving fresh and healthy foods in the United States. The salad-focused restaurant concept has invested heavily to develop a captive network of growers that help ensure the freshness of its produce, a distinct competitive advantage. Additionally, management’s investment in automation technology, known as the “Infinite Kitchen,” has shown strong promise of significant labor cost savings, a reduction of order fulfillment errors, and increased restaurant throughput. While Infinite Kitchen has only been tested in a handful of stores to date, initial data supports the potential for automation technology to significantly improve both margins and average unit volumes. The stock rose in the quarter on accelerating same-store sales growth and better than expected guidance from management. In addition, investors took notice that material margin improvements could quickly reduce Sweetgreen’s cash burn, a prior source of concern. Sweetgreen was a new position for the Fund in the quarter.”
Overall SG ranks 9th on our list of the best stocks to buy according to Jim Cramer. While we acknowledge the potential of SG as an investment, our conviction lies in the belief that under the radar 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 SG 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.