We recently published a list of Jim Cramer Discussed These 12 Stocks Recently. In this article, we are going to take a look at where The Estée Lauder Companies Inc. (NYSE:EL) stands against other stocks that Jim Cramer discussed recently.
Jim Cramer, the host of Mad Money, recently examined the latest market trends, highlighting some important themes where stocks have faced challenges, especially those reliant on business with China.
He pointed out that certain stocks often experience significant drops after earnings reports, a trend he has observed consistently. However, Cramer cautioned that finding buying opportunities from these dips is not always as simple as it may seem. While these stocks might appear attractive when they get hit, he emphasized that they are typically impacted unjustifiably, suggesting that if you buy them whenever they drop, you would likely see positive returns. He added:
“So you’re probably saying, can it really be that easy? I mean, why aren’t I a millionaire? Well, I’ll tell you why. Because there are landmines, real landmines in the yellow brick road times when the dips are milling at the beginning so I’m gonna spell those out for you too.”
READ ALSO: Jim Cramer Highlighted Buying Opportunities in 13 Stocks and Jim Cramer Shed Light on These 8 Stocks Recently
One of the first questions Cramer believes investors should ask themselves is whether a stock is tied to China in any way. This dependency, he mentioned, has severely impacted many companies recently. Cramer also pointed out that retailers, especially department stores, have taken a hit, as well as companies in the chemical sector, which heavily rely on Chinese demand. According to Cramer, these businesses need orders from China to stay afloat, making them vulnerable to fluctuations in that market.
Another factor Cramer highlighted is the growing impact of GLP-1 drugs, which have the potential to curb cravings for certain food products. Cramer pointed to beloved brands like Hershey, Oreos, and Fruit Loops, among others, which are now facing challenges as these drugs reduce consumer desire for such treats. He noted that with demand for these products waning, the stocks of companies producing them are suffering.
“Bottom line: Always remember that there are indeed Teflon stocks in any market. The key? Don’t buy them unless and until they get knocked down and then remember they’ll get up again. You are never gonna keep them down.”
Our Methodology
For this article, we compiled a list of 12 stocks that were discussed by Jim Cramer during the episode of Mad Money on February 5. 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 close-up of a makeup artist carefully applying Makeup Products to an clients face.
The Estée Lauder Companies Inc. (NYSE:EL)
Number of Hedge Fund Holders: 49
The Estée Lauder Companies Inc. (NYSE:EL) was mentioned during the episode. Here’s what Mad Money’s host had to say:
“First, you have to ask, is it dependent upon China in any way, shape, or form? That’s been the kiss of death for a really good casino company, Wynn Resorts, and for Estee Lauder, the mess of a cosmetics company.”
Estée Lauder (NYSE:EL) produces and distributes a diverse array of skincare, makeup, fragrance, and hair care products worldwide, featuring well-known brands like Estée Lauder and Clinique. The company stock was down over 50% in 2024.
Aristotle Atlantic Partners, LLC stated the following regarding The Estée Lauder Companies Inc. (NYSE:EL) in its Q3 2024 investor letter:
“We sold The Estée Lauder Companies Inc. (NYSE:EL), as Chinese consumer headwinds continue to present an unpredictable pace of recovery. And while Estée has taken action to reduce costs and drive a profit recovery plan, it is apparent that a certain level of volume will be necessary to make that plan successful, and that is difficult to predict with a high degree of certainty. China-driven travel retail business continues to be slower than anticipated, pushing out the expected timing of a recovery. Despite the weakness in share price, Estée continues to trade at a premium multiple, and consensus estimates may prove aggressive should Chinese consumer weakness linger. Lastly, with a pending transition in both the CFO and CEO roles, we see the potential for another reset as the new management team takes over.”
Overall, EL ranks 2nd on our list of stocks that Jim Cramer discussed recently. While we acknowledge the potential of EL 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 time frame. If you are looking for an AI stock that is more promising than EL 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.
