We recently published a list of Jim Cramer Latest Portfolio: 10 Stocks to Watch in September. Since Kroger Co (NYSE:KR) ranks 4th on the list, it deserves a deeper look.
Jim Cramer said during his latest program on CNBC that the Federal Reserve wanted to contain inflation and make sure it’s going in the “right direction” before initiating its first rate cut. With the first aggressive rate cut, Cramer believes “most businesses” can thrive.
Cramer, who is currently in Silicon Valley, said technology companies are, however, not “hostage” to the Fed and they are “automaters.” He said these companies are trying to raise margins by automating “what can be automated.”
Jim Cramer said currently cash is flowing towards companies that “would have been doomed” if the Fed didn’t start cutting rates. He said this was “day one” in many more rate cuts to come, which would create a “backdrop of positivity” for the broader market.
For this article, we chose 10 important stocks Jim Cramer talked about during his latest programs on CNBC. With each company we have mentioned the number of hedge fund investors. 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).
Kroger Co (NYSE:KR)
Number of Hedge Fund Investors: 46
Jim Cramer in a recent program praised Kroger Co (NYSE:KR) latest results, saying many thought the company would be “distracted” because of its efforts to buy Albertsons and won’t be able to focus on its core business. However, the company proved the opposite is true. Cramer said CEO Rodney McMullen’s “magic” kept food costs down while tackling the tough labor force and commodity environment.
“Kroger Co (NYSE:KR) confounded the critics by developing a superior loyalty program, regionalizing their storage and creating the best store brand private label products out there.”
Cramer also highlighted a comment from the CEO made during the latest earnings call:
“Budget-conscious customers are buying more at the beginning of the month to stock up on essential items and groceries.
And then as the month progresses, they are more cautious with their spending. In response, we are supporting our customers by keeping prices low through promotions, including loyalty discounts, personalized offers and fuel rewards. We are also expanding our multi-tiered portfolio of Our Brands products, which provides customers exceptional alternatives to national brands competing on quality, while at a noticeable lower price point. Our long term model demonstrates that by consistently keeping prices low, we increase customer loyalty and grow share of wallet. While the food-at-home industry remains competitive, our model drives efficiencies that allow us to sustainably invest in value and maintain competitive price spreads with key competitors.”
Read the full earnings call transcript here.
Overall, Kroger Co (NYSE:KR) ranks 4th on Insider Monkey’s list titled Jim Cramer Latest Portfolio: 10 Stocks to Watch in September. While we acknowledge the potential of Kroger Co (NYSE:KR), 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 KR 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.
