We recently compiled a list of the Jim Cramer's Lightning Round: 7 Stocks Under the Spotlight.In this article, we are going to take a look at where The Kraft Heinz Company (NASDAQ:KHC) stands against the other stocks featured in Jim Cramer's Lightning Round.
Jim Cramer, the host of Mad Money, offered his insights into the market's recent performance, highlighting why the tech-heavy Nasdaq failed to make a strong rebound. He pointed to a unique combination of factors contributing to the setback: the influence of the U.S. government and the actions of Mark Zuckerberg. Cramer drew a parallel between the tech sector and the pharmaceutical industry, which similarly faces increasing scrutiny and restrictions from federal authorities.
After attending the JPMorgan Healthcare Conference, Cramer expressed his optimism about the future of medicine. Despite the promising developments in the healthcare space, he pointed out that the U.S. government doesn't appear to be particularly favorable toward executives in the industry, who are investing heavily in research and development. He noted that while these companies are spending billions on R&D, they still find themselves under fire, with the Biden administration targeting major drugs as part of the Inflation Reduction Act.
“We are in some weird moment where the two best industries we have are in the crosshairs of the federal government with Mark Zuckerberg aiding and abetting the prosecution. The drug companies managed to rally today because we heard their side of the story. But tech, the tag team of the government and Meta may have been too much for everyone. At the end of the day though, buyers finally came in to find bargains in the semis and software and the drug stocks, only the drug stocks finished in the green.”
“At the same time, I sure didn't like what I saw when I watched the Joe Rogan Experience this weekend when a very unfettered Mark Zuckerberg... took some shots, I would say cheap shots, I mean just terrible, at Apple that made me want to throw a yellow flag 15 yards on sportsmanlike conduct.”
What bothered Cramer even more, however, was the U.S. government's increasing intervention in the semiconductor industry, which he felt undermined the efforts of experts like Jensen Huang. Over the weekend, new restrictions were put in place that limited the number of GPUs companies could sell, further complicating the situation for the tech sector.
“The bottom line: Are the charges against these two industries just glancing blows? Nah, this was just one day where the bond market didn’t crush every stock.”
Our Methodology
For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on January 13. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 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).
Is Kraft Heinz Company (KHC) the Cheap Value Stock to Invest in According to Warren Buffett?
A closeup of an assembly line worker inspecting a newly produced jar of condiments and sauces.
Cramer made his dislike for The Kraft Heinz Company (NASDAQ:KHC) apparent as he commented:
“Well, what's happening at Kraft Heinz? Exactly what should happen at Kraft Heinz. That's the worst collection of brands I've ever seen. I think those guys should continue to go lower and they are living up [to] their expectations.”
Kraft Heinz (NASDAQ:KHC) manufactures and markets a wide range of food and beverage products under brands like Kraft, Heinz, Oscar Mayer, and Philadelphia. In 2024, the company struggled to regain momentum, with its stock declining by over 23% throughout the year. Despite setting modest goals for organic sales growth of 0% to 2% at the start of the year, it consistently underperformed, falling short of expectations in the first quarter with a 0.5% decline in organic sales. The situation worsened in the following quarters, with organic sales dropping by 2.4% in the second quarter and 2.2% in the third, indicating a troubling downward trend for the company.
The company’s adjusted earnings through the first nine months of 2024 showed only slight improvement compared to the same period in 2023, and the company has made little progress in reducing its long-term debt. Its financial challenges are compounded by broader shifts in consumer preferences, particularly among younger demographics, who are becoming more focused on healthy eating.
Kraft Heinz’s (NASDAQ:KHC) products, often not seen as healthy options, may face increasing pressure in the future as these trends continue to shape consumer behavior. The company recently pulled Lunchables from U.S. schools due to disappointing demand, despite previously aiming to target the $25-billion educational market with the product.
Overall KHC ranks 2nd on our list of the stocks featured in Jim Cramer's Lightning Round. While we acknowledge the potential of KHC 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 KHC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
