• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Consumer Discretionary

Jim Cramer: These Sleeper Stocks Are Making a Huge Comeback

These consumer products names are the comeback kings of this market.
By JIM CRAMER
Aug 20, 2018 | 06:59 AM EDT
Stocks quotes in this article: KMB, PG, GIS, K, PEP, SPG, JCP, VTR

We've witnessed some astonishing and unheralded comebacks in the last few weeks -- and they are a reason to respect this market in ways that you may not have thought possible. Let me give you a list of some of the most unreal returns to glory we have seen in ages.

First, we got incredible news this past week from Kimberly-Clark (KMB) in the form of price increases to be put through in some of their most popular products -- like Huggies diapers, Cottonelle tissues and Viva paper towels.

Now, earlier this summer Procter & Gamble (PG) announced price increases on its array of similar products, and investors were skeptical they could hold. The stock went up a bit on a bad quarter -- truly the tell that some believed that their mid-single-digit increases would go through. The key signal from Kimberly? The company said the increases would be "mid-to-high single digits," So much for worries about whether the competition would try to take advantage of P&G's increase and take share. Both stocks continued to advance after the news, signaling how really this news is for shareholders.

Consumer Products On Fire

The whole consumer products group then caught fire -- including the much maligned General Mills (GIS) , a 4% payer that I recommended around $50. And, unfortunately, it still hasn't come back to that level. If you want to know the power of this move, though, look at Kellogg (K) , which has had a remarkable run on, well, nothing. Oh and it's worth pointing out that these stocks are signaling that rates are headed lower -- perhaps significantly, because these stocks are all yielding 3% or higher.

This price increase has a double-fold opportunity because these adjustments upward are coming at the exact same time as the actual commodity costs are falling. That means some sweet gross margin expansion.

  • Two Major Themes Dominated the Market This Week
  • Wall Street Hates Newell Brands, But I Don't

This industry is starved for growth: hence the $3.2 billion bid for SodaStream paid by Pepsico (PEP) which some could say is a signal of the post-high-water mark of flavored sodas in plastic bottles sold at the supermarket. SodaStream sells machines that produce largely carbonated water, that need no plastic bottle creation and can be bought on line, so the next-gen folk never need to leave their home.

Okay, here's a total wild one and a testament to the fact that this market plays dead but doesn't stay dead: Simon Property Group (SPG) . Do you know that JC Penney (JCP) is in 67 of the 107 Simon Property Group malls? Talk about perilous, right?

Yet here's a stock that is just pennies from its 52-week high with a 4.4% yield. I find that astounding. The bonds of JC Penney are falling fast, signaling that the company might limp into the holiday season. Yet even as JCP is an anchor of so many of their malls, it's a signal that the market knows Simon will do just fine, maybe better, without the moribund JC Penney taking up space. There are many new, more experiential ways -- stores or otherwise -- that can fill the space.

One more.

REIT Stuff

No matter how many times, it seemed, that Deb Cafaro came on Mad Money to describe how well Ventas (VTR) is doing, no one seemed to listen because there had been some senior housing overbuilding and that is the bread and butter of this amazing REIT.

Deb told us in 2016 that we would begin to see a cessation of new building because of supply and demand and it would be self-correcting. Well, that's exactly what happened, it self-corrected, and that's evident from her numbers as her stock is up huge from when she reported her last quarter -- which, initially and mistakenly, the market didn't like despite the company offering a 6.4% yield and 23% returns through all sorts of cycles in a sector with what is now compelling demand.

The amazing thing is it seems there is more demand now at a much-higher price -- $59 with a 5.3% yield. What happened? Nothing with Ventas. It delivered. The market simply changed its mind on the REITs, especially the health care REITs, of which Ventas is most representative. And, yes, like with the surge in utilities, it didn't hurt that the yield-hungry buyers came back when the 10-year started going up in price and down in yield once again.

Sleeper stocks making a comeback. Only in this so-called aging bull market that just keeps reinventing itself on the fly.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long PEP.

TAGS: Investing | U.S. Equity | Consumer Discretionary | Consumer Staples

More from Consumer Discretionary

Altria Heads Lower but a Long-Term View May Be Helpful

Bruce Kamich
Apr 20, 2021 12:20 PM EDT

Is there another trade to be made?

Planet Fitness Looks Out of Shape Right Now

Bruce Kamich
Apr 13, 2021 3:11 PM EDT

Our latest look at the PLNT charts.

Cruise Operator Carnival Still Isn't a Stock I Want to Climb Aboard

Jonathan Heller
Apr 9, 2021 9:00 AM EDT

The window the company offered this week on its results and financial state continue to give this value investor pause.

Norwegian Cruise Line Finally May Be Cruising Toward Higher Prices

Bruce Kamich
Apr 6, 2021 9:01 AM EDT

However, the technical signals of the cruise line operator don't entirely indicate smooth sailing ahead.

2 Land Plays That Insiders Are Buying

Bret Jensen
Mar 31, 2021 8:30 AM EDT

Green Brick Partners and Limoneira Co. offer reasons to buy their shares beyond the recent insider purchases of stock.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 07:35 AM EDT BOB LANG

    Join Me for a Special Earth Day Webinar, Talking Volatility and VIX

    After the close Thursday join me for a free webina...
  • 04:17 PM EDT REAL MONEY

    Wednesday on Real Money Pro

    Get-rich quick schemes offer little more than pipe...
  • 11:09 AM EDT GARY BERMAN

    S&P Futures

    FIBOCALL: The S&P futures was off 1.5 %... ...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login