On Thursday, CNBC’s Jim Cramer offered investors three options for packaged food stocks they can take refuge in as the stock market continues to tumble.
“With commodity prices falling significantly, food stocks can become recession-proof safe havens. But you have to be selective, which means sticking with the winners that we know are doing well” , did he declare.
All three major indexes fell on Thursday, the last day of the second quarter. The Dow Jones Industrial Average and S&P 500 had their worst quarters since the first quarter of 2020, while the Nasdaq Composite saw its worst declines since 2008.
The “Mad Money” host said packaged food stocks are great games in turbulent times and fit today’s market for two main reasons.
“First, commodity prices have already started to crash, and those savings are flowing directly into the bottom line. … Second, almost everyone seems convinced that we’re heading into a recession, and while I’m not not totally convinced, it creates a much better backdrop for Steady Eddie’s packaged food stocks,” he said.
Here are his top three picks:
Third Place: Campbell’s Soup
“It’s not my favorite cooking game, but I haven’t felt this good about Campbell Soup in a long, long time,” Cramer said.
The company, which is home to famous brands such as Froot Loops, Pop-Tarts and Rice Krispies, is expected to finalize spinoffs by the end of next year.
“Their snacks division in particular is great, and I think it will be worth a lot more as an independent business that isn’t hostage to the much slower growth [of the] North American grain company. Also, we don’t have a lot of good pure snack games,” Cramer said.
1st place: General Mills
General Mills beat Wall Street estimates for revenue and profit in its latest quarter, although its full-year profit outlook fell short of analysts’ estimates. The stock hit a new 52-week high on Thursday.
Cramer praised the company’s “breakout quarter” and called the company the best breed operator that has been at the top of its game in recent years.
“I think it’s worth buying here, but you might want to leave room to buy more the next time we’re hit by a market-wide pullback,” Cramer said.
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