We recently published an article titled Jim Cramer Discussed These 7 Stocks. In this article, we are going to take a look at where Albertsons Companies, Inc. (NYSE:ACI) stands against the other stocks Jim Cramer recently discussed.
Jim Cramer, host of Mad Money, recently shared his thoughts on the market’s movements this week, focusing on the economic data that’s shaping the outlook. He highlighted the upcoming nonfarm payroll report on Friday, noting its potential to sway market sentiment. Cramer pointed out that the market has been shaken by the persistently high 10-year treasury bond yields, which refuse to drop.
“Friday’s employment numbers need to show lower wage growth and disappointing hiring. Now that could bring down the yield in the 10-year and therefore make people feel that the Fed will be back on schedule to start cutting the rates again. We gotta get them back into that groove, you know. On the other hand, if hiring and wages remain hot, well then anything good that happens next week could be repealed.”
READ ALSO Jim Cramer Discussed These 10 NASDAQ 100 Stocks Recently and Jim Cramer’s Bold Predictions About These 10 Healthcare Stocks
The labor report is especially critical, according to Cramer, because despite the strength in sectors like autos, housing, and materials, the overall economy may still be running too hot for the Fed to slow it down as needed. He turned his attention to other economic indicators, such as the Purchasing Managers’ Index (PMI), which is offering strong signals of economic activity. Cramer mentioned a recent report, including Monday’s release of the PMI composite index, as an important barometer for the economy.
This data, he explained, provides valuable insights into how the economy is performing across different sectors, with particular attention to manufacturing, which has shown particularly strong performance. In addition to these key reports, Cramer also mentioned the implications of the Job Openings and Labor Turnover Survey (JOLTS), specifically focusing on job openings.
“I’ve been mulling over these job openings numbers and I keep thinking about how President-elect Trump might reverse the high levels of immigration we’ve seen under the Biden administration.”
Cramer warned that mass deportations could create a labor shortage that would drive wages even higher, especially if the country cannot rely on enough workers to fill the gaps. In that case, Cramer mused, “robots may be our only hope,” alluding to the role of automation in addressing potential labor shortages.
“So here’s the bottom line: It’s a light week, but still impactful, accept that people will be on edge ahead of Friday’s employment report. Still, I think you should do some buying if the market gets hammered. As we saw today, it’s not nearly as bad out there as so many think.”
Our Methodology
For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during the episode of Mad Money on January 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 fresh produce section in a modern grocery store.
Albertsons Companies, Inc. (NYSE:ACI)
Number of Hedge Fund Holders: 58
Discussing Albertsons Companies, Inc. (NYSE:ACI), Cramer said:
“This gigantic grocery store chain was trying to merge with Kroger to create a powerhouse just so it could compete actually with Amazon, Costco, and Walmart but the deal was blocked and I think that might’ve really hurt Albertsons. In the interim, I wanna hear if there’s still a lot of food inflation to come. I also wanna know if they’ve seen any decline in the consumption of salty snacks and cookies and candy alongside the rise of the GLP-1 drugs.
Cornell Business School just put out this really amazing study. It shows a meaningful decline in the consumption of these categories, which is exactly what you’d expect… But anything that reduces consumption by double digits in some categories is gonna actually hurt Albertsons’ profitability, along with that of the processed food companies.”
Albertsons Companies, Inc. (NYSE:ACI) operates food and drug stores offering groceries, health and beauty products, pharmacy services, fuel, and more, while also manufacturing and processing food products for sale. The company operates under various store banners. The company recently reported its third-quarter earnings, posting a net income of $401 million, or $0.69 per share. Loyalty membership saw a significant increase, rising by 15% to reach 44.3 million members.
Management stated that the strategies put in place to address customers’ demand for value amid inflation are proving effective. CEO Vivek Sankaran mentioned that over the next three years, the company aims to generate $1.5 billion in savings. This will be invested into improving the customer value proposition and growth initiatives, while also helping to navigate the challenges posed by inflation.
Sankaran also highlighted that financial pressures on consumers remain significant, prompting Albertsons Companies, Inc. (NYSE:ACI) to explore further price reductions on select products. The company is closely monitoring the impact of GLP-1 weight-loss drugs on consumer behavior. He noted the significant reduction in calorie intake facilitated by these drugs and explained that if 10% of customers were to reduce their consumption by 10%, it could possibly result in a 100 basis point decline in food volume.
Overall ACI ranks 2nd on our list of the stocks Jim Cramer recently discussed. While we acknowledge the potential of ACI 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 timeframe. If you are looking for an AI stock that is more promising than ACI 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.