In his first "Executive Decision" segment of Mad Money Thursday evening, Jim Cramer spoke with Mark Smucker, president and CEO of The J.M. Smucker Co. (SJM) , the packaged foods maker that reported earnings Thursday.
Smucker said that consumers have been flocking to his company's brands. As more people work from home, they also eat from home, and peanut butter and jelly is still an American lunchtime favorite.
When asked about the cautious guidance, Smucker explained that while sales have been strong in their at-home segment, the loss of restaurants cannot be completely offset. Smucker expected to see a gradual return to normal and a return to the office for most, but not all, people.
Finally, Smucker commented on some of their smaller, emerging brands. He said their Uncrustable brand was grossing $1 million when they purchased it. It is currently a $350 million brand.
Let's check out the charts of SJM.
In this daily bar chart of SJM, below, we can see that prices have been on a "wild ride" the past four months. Prices started trading sideways back in August of last year, and then in March and April prices swung up and down sharply to unnerve even the calmest investor. SJM crossed the popular moving averages several times.
The On-Balance-Volume (OBV) line shows a rise from August into May but recently the OBV line has weakened.
The trend-following Moving Average Convergence Divergence (MACD) oscillator has moved below the zero line for an outright sell signal.
In this weekly bar chart of SJM, below, we went back four years to get some perspective on the sideways price action going back to the middle of 2017. Buying interest has developed around the $95 area and sellers up around the $130 area and above.
The weekly OBV line has shown a similar movement and suggests that SJM has been a trading vehicle for some investors.
The weekly MACD oscillator has spent most of the last four years below the zero line. It recently gave a buy signal that seems to be slipping away.
In this first Point and Figure chart of SJM, below, we used daily price data. Here the chart is suggesting that a decline to the $96 area is possible.
In this second Point and Figure chart of SJM, below, we used weekly close only data and here the chart is projecting a possible rally to the upper end of the long trading range.
Bottom line strategy: In full disclosure I have been using various Smucker products for as long as I can remember but that does not make it an attractive investment. Avoid for now.