CNBC’s Jim Cramer said Friday that investors looking to diversify beyond the struggling artificial intelligence trade should consider consumer staples stocks.
of Nasdaq-100The company, which tracks the biggest tech stocks, ended October down nearly 7%. Investors rotated into other, more defensive areas of the market. of S&P 500 Equal Weight It rose about 5% in the same month. (An equal-weighted index treats all S&P 500 stocks the same, rather than weighting them by market capitalization.) Daily necessities index rose 11.4%, making it the second-best performing sector after energy.
“We have to accept what the market gives us. Until we solve some of the problems in the technology industry, other groups may be better bets for the time being,” the “Mad Money” host said. “I like the idea of doing a little bit of camping in a classic spot.”
Kramer highlighted four companies he believes are particularly attractive in the consumer staples space. This group features companies with common brand names that people tend to buy regardless of market or economic conditions.
Kimberly-Clark: The maker of Kleenex tissues and Huggies diapers is one of the newest holdings of Kramer’s Charitable Trust, a portfolio managed by CNBC’s Investment Club. Kramer is pending Kenviewwhich owns brands such as Tylenol and Band-Aid. He expects the partnership will improve efficiencies and create a consumer products powerhouse. kimberly clark Although the company’s stock price rose nearly 11% in October, it still trades at less than 15 times earnings and has a dividend yield of 4.7%. “I think this movement is just getting started,” Kramer said.
Procter & Gamble: The investing club exited its longtime position in P&G in July, but Cramer said the company remains an attractive defensive investment after last week’s better-than-expected quarterly results. He also expressed confidence in the new CEO Shailesh Jejrikar. shares of procter and gamble Although Kimberly-Clark rose 11% in October, Kramer likes Kimberly-Clark’s low valuation and high dividend yield.
Constellation Brands: The maker of Modelo and Pacifico beers is showing signs of improvement, with its core beer business gaining market share and its smaller wine and spirits division reporting a 15% increase in shipments last quarter. shares of constellation brand Although the company soared 20% in October, Cramer still thinks the stock, with a P/E ratio of about 11 and a yield of more than 3%, still has value. “It appears the worst is yet to come for Constellation Brands,” Kramer said.
Coca-Cola: This is Kramer’s favorite of the major soda companies. coca cola on Tuesday released a strong quarterly report driven by volume growth rather than price increases. He also praised the innovation in zero-calorie beverages and the protein options in the Fairlife Milk business. The stock price rose 9% in October.
