We recently compiled a list of the Jim Cramer’s Game Plan: 23 Stocks to Watch. In this article, we are going to take a look at where Colgate-Palmolive Company (NYSE:CL) stands against the other stocks to watch according to Jim Cramer.
As Wall Street dives into the heart of earnings season, Jim Cramer has provided insights into market trends and earnings reports to watch in the upcoming week. Cramer remarked,
“It’s hard to believe, but this market’s now been up for six straight weeks. That’s right, despite interest rates running higher since mid-September, despite being on the verge of an election where both candidates want to pile on trillions of dollars of debt to an already unfathomable amount of borrowing, this market seems like it can’t help itself from going higher.”
Cramer highlighted the influence of the Federal Reserve, noting that ever since the rate cut on September 18, the market has largely trended upward. He emphasized that it is not solely the Fed driving this bullish sentiment, the earnings season has brought some remarkable quarterly results. With strong performance from banks kicking off the earnings cycle, Cramer posed the question of whether the rally could extend into a seventh consecutive week, suggesting following his game plan to assess this possibility.
On a separate note, addressing economic indicators, Cramer warned that if the economy continues to produce solid numbers, the likelihood of substantial rate cuts will diminish. While he believes that rates will eventually decline, he cautioned those shorting Treasurys, suggesting that they may be making a mistake.
Cramer noted a significant caveat, which is the upcoming election, and pointed out that both candidates are advocating potentially inflationary policies.
“Both candidates have pushed potentially inflationary policies. As I said at the top, if Trump can win enough of a majority to pass his huge tariffs, or Harris expands housing tax credits and de facto subsidy, they could push home prices higher. Then inflation might stage a comeback. But I’m not betting on that. I think both parties are terrified of being blamed for inflation, which almost single-handedly sunk Joe Biden’s presidency. No matter what the candidates campaign on, I don’t see their allies in Congress taking any chances with inflation beyond the usual unwillingness to balance the budget.”
He concluded that those betting against Treasurys have overreached, suggesting that their efforts to counter the Fed’s policies are unlikely to end well. Cramer observed that when a large number of investors align on one side of a trade, as seen currently, that group often ends up being incorrect.
Our Methodology
For this article, we compiled a list of 23 stocks that were discussed by Jim Cramer during his episode of Mad Money on October 18. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 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).
An array of toothpaste, toothbrushes, and mouthwashes on a bright background, highlighting the company’s oral care products.
Colgate-Palmolive Company (NYSE:CL)
Number of Hedge Fund Holders: 52
Cramer discussed Colgate-Palmolive Company (NYSE:CL), noting that the market has an excessive affection for the company.
“Finally on Friday, we got Colgate-Palmolive. And here’s one where I stand, it doesn’t even matter where I stand… It’s kind of an unnatural thing, frankly. The Street loves Colgate Palmolive. I think that the love is way overdone, but that does not matter. Colgate always wins. Kind of drives me crazy. I just want to find out what people really think that they love it so much, but it doesn’t matter. It’s inscrutable.”
Colgate-Palmolive (NYSE:CL) is a prominent manufacturer and seller of consumer products, offering a range of well-known brands including Colgate, Protex, Sanex, Meridol, Softlan, and Ajax. With a rich history of consistent performance, the company has an impressive 61 years of dividend increases, highlighted by a recent 4.2% rise in its quarterly dividend to $0.50, marking the 62nd consecutive annual increase. The dividend is payable on November 15 to shareholders of record on October 18 and the dividend yield is 2.01%, as of October 21.
In its second-quarter results, Colgate-Palmolive (NYSE:CL) achieved gross margin expansion for the fourth straight quarter, along with double-digit growth in operating profit, net income, and earnings per share. The company raised its guidance for organic sales and Base Business earnings per share for 2024, maintaining a net sales growth expectation of 2-5%.
The adjustment is owed to an increased organic sales growth outlook of 6-8%, up from the previous 5-7% forecast, despite anticipated foreign exchange challenges. Additionally, the company continues to expect double-digit growth in earnings per share on a GAAP basis, while the revised Base Business earnings per share growth is now expected to be between 8-11%, compared to earlier projections of mid to high-single-digit growth.
Overall CL ranks 11th on Jim Cramer’s list of stocks to watch. While we acknowledge the potential of CL 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 CL 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.