We recently published a list of Jim Cramer’s Latest Portfolio: Top 9 Stocks to Buy and Sell. Since Celsius Holdings, Inc. (NASDAQ:CELH) ranks 8th on the list, it deserves a deeper look.
Jim Cramer is exuberant about the Federal Reserve’s aggressive rate cut.
“Believe me, there are few things more friendly than a 50 basis point rate cut,” Cramer said in a recent program.
The CNBC host said that he has reminded his viewers repeatedly that when the Fed is your “enemy” you should stick to recession-proof stocks that can produce consistent earnings despite market slowdowns.
“Once the Fed is done tightening and we start seeing signs of impending rate cuts you need to load up on the cyclicals, the companies that see massive earnings growth when the economy accelerates,” Cramer reminded his viewers about his advice on how to play the interest-rate game.
Jim Cramer has been talking about all sorts of stocks during his latest programs. In this article we picked 9 important stocks he’s bearish/bullish on and analyzed these companies in detail. With each stock we have mentioned its hedge fund sentiment. 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).
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Celsius Holdings, Inc. (NASDAQ:CELH)
Number of Hedge Fund Investors: 27
Jim Cramer said in a latest program on CNBC that something is wrong with Celsius Holdings, Inc. (NASDAQ:CELH).
“The stock was at $99, and now it’s at $34 and we have not word from John Fieldy (company CEO) other than everything is great. That’s no longer tolerable for me. I want to know what’s wrong.”
Celsius Holdings, Inc. (NASDAQ:CELH) is down 47% so far this year. The energy drinks company is facing headwinds amid rising U.S. CPI for nonalcoholic beverages, exacerbated by the company’s price hikes in 2021 and 2022. These increases were implemented to address supply chain challenges, but they’ve led to higher prices, contributing to a shift in consumer behavior. More customers are opting for grocery mass online purchasing instead of convenience stores because of high prices.
With a 12-pack of Celsius Holdings, Inc. (NASDAQ:CELH) priced at around $21—nearly three times that of Coca-Cola—it’s not surprising that premium pricing could dampen demand further. The company’s U.S. sales growth may continue to slow, especially when compared to its impressive pre-pandemic 2-year compound annual growth rate (CAGR) of 44.2% and pandemic 4-year CAGR of 104.6%.
On the upside, Celsius Holdings, Inc. (NASDAQ:CELH) posted strong bottom-line growth in Q2 2024, with gross profit margins improving to 52% and adjusted EBITDA margins at 24.9%. However, there’s uncertainty surrounding how sustainable these margins will be as the company plans to ramp up promotional spending and marketing investments in the second half of 2024, which could pressure profit margins in the near term.
Alger Small Cap Growth Fund stated the following regarding Celsius Holdings, Inc. (NASDAQ:CELH) in its Q2 2024 investor letter:
“Celsius Holdings, Inc. (NASDAQ:CELH) engages in the development, marketing, sale, and distribution of functional drinks and liquid supplements. It also offers post-workout functional energy drinks and protein bars. During the quarter, shares detracted from performance after the company reported fiscal first quarter revenues below analyst estimates. The revenue shortfall was attributed to ongoing inventory management challenges with PepsiCo, which decelerated year-over-year revenue growth from over 100% to approximately 37%. Despite the near-term growth slowdown, we believe Celsius remains well positioned to potentially capture market share within the large energy and soft drink industry over the long-term.”
Overall, Celsius Holdings, Inc. (NASDAQ:CELH) ranks 8th on Insider Monkey’s list titled Jim Cramer’s Latest Portfolio: Top 9 Stocks to Buy and Sell. While we acknowledge the potential of Celsius Holdings, Inc. (NASDAQ:CELH), 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 CELH 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.