We recently published an article titled Jim Cramer Discussed 9 Stocks for This Week’s Game Plan. In this article, we are going to take a look at where The Procter & Gamble Company (NYSE:PG) stands against the other stocks Jim Cramer recently talked about.
Jim Cramer, the host of Mad Money, recently discussed this week’s events on Wall Street, which included President-elect Donald Trump’s inauguration and several companies’ earnings reports. Cramer touched on the broader theme of business operations, reflecting on how companies generally want the freedom to operate with minimal interference and lower taxes. He posed the question of whether that’s unreasonable, noting that it really depends on one’s perspective.
“Very unreasonable if you think big business is inherently nefarious and all these companies are run by greedy oligarchs, but if you believe in free market capitalism, letting businesses do what they want within certain limits, well that is the name of the game.”
READ ALSO 9 Stocks on Jim Cramer’s Radar and Jim Cramer’s Lightning Round: 7 Stocks Under the Spotlight
When discussing Trump’s inauguration, Cramer highlighted that Trump seems intent on rolling back many of the regulations put in place by the Biden administration, including closing borders and taking aggressive steps against undocumented immigration. While acknowledging that not all of Trump’s plans might be realized, Cramer remarked that some of his policy changes could be enacted quickly, while others might never reach the Supreme Court. Regardless, he noted that it appears Trump is preparing for a strong push to support business interests.
“That’s the only thing that can justify this market’s recent rally. Now, my interactions with soon-to-be President Trump tended to revolve around the stock market, which he thinks of as the true barometer of his job performance. It’s funny because Biden never cared about the stock market even though stocks did great during his administration.”
According to Cramer, Biden approached his presidency with a focus on labor and class, whereas Trump has made it clear that he intends to prioritize business and capital. He expressed little expectation that this would change in Trump’s second term, suggesting that there will be plenty of executive orders to analyze moving forward.
“Here’s the bottom line: As you wrap up the Biden administration, even though I’ve been very critical of his approach to the business, stocks have done well. The Dow is up 41%, the S&P is up 58%, and the Nasdaq recorded 49%. Any other president would be proud of that track record. The fact that Biden seems to not be, maybe it says pretty much everything.”
Our Methodology
For this article, we compiled a list of 9 stocks that were discussed by Jim Cramer during the episode of Mad Money on January 17. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the third quarter of 2024, 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 happy couple viewing the products of this household and personal product company in a mass merchandiser store.
The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 68
Talking about a major player in the consumer packaged goods industry, The Procter & Gamble Company (NYSE:PG), Cramer said:
“Wednesday we got some real firecrackers… We also get results from two household names, Procter & Gamble and Johnson & Johnson. I think Procter might struggle with the strong dollar in China while J&J still has to deal with talc asbestos lawsuits and the recent acquisition of Intra-Cellular for $14 billion, which could threaten its pristine credit rating. The market has turned against these kinds of stocks viciously. Too slow growing. I think you can put either way though and make good money just by reinvesting their juicy dividends.”
Cramer also recently discussed the reasons behind Procter & Gamble’s (NYSE:PG) recent stock decline, acknowledging that it’s a great company but noting some important factors contributing to its struggles. One major factor, according to Cramer, is the impact of rising long-term interest rates, which have been climbing ever since the Federal Reserve began cutting short-term rates.
Cramer explained that when interest rates spike, stocks like Procter & Gamble are often hit hard. He pointed out that while dividends are typically seen as a protective feature for such stocks, they become vulnerable when bond yields rise, as bonds become more attractive to investors. He added:
“… which brings me to the second reason this group has just been hammered. The dollar’s gotten too strong. These consumer packaged goods companies tend to be very big overseas… The consumer staples all trade together. If the dollar hurts a big international company like Procter & Gamble as it is, it’s gonna reverberate even into Clorox because they’re all in the same sector, and sector ETFs are like gravity. They pull all their subjects down, even the ones that shouldn’t.”
Cramer also highlighted another important challenge: pricing pressures. He noted that heavy discounts on consumer products and intense pricing competition are making it increasingly difficult for companies like Procter & Gamble to keep up.
Overall PG ranks 5th on our list of the stocks Jim Cramer recently talked about. While we acknowledge the potential of PG 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 PG 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.
