Jim Cramer says he likes the stock of these three restaurants
CNBC’s Jim Kramer on Thursday offered investors a list of his favorite stocks in the restaurant industry that he thinks will do well once the economy eventually stabilizes.
“Maybe the economy is getting back to normal here, or at least the head of the Fed thinks it could be getting back to normal soon. And under normal circumstances, stock picking is much more about identifying the best players in an industry than just jumping from sector to sector. ,” he said.
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His comments came after Federal Reserve Chairman Jay Powell said on Wednesday that the central bank could cut its aggressive interest rate pace as early as December, sparking a market rally.
Cramer explained that he chose to look into restaurants because investors can easily understand their “completely consumer-facing” business operations.
Here are some of his favorite restaurants:
Growth Stock Pick: Chipotle Mexican Grill
Kramer praised the burrito chain for its mobile ordering technology and brand loyalty, which boosts its pricing.
“What really worries me Chipotle simple: as their spending declines — and this is happening now that the Fed is winning the war on inflation — their incomes could skyrocket,” he said.
Defense Stock Pick: McDonald’s
McDonald’s It’s a classic defensive stock, Cramer said, that usually continues to perform well in tough economic times.
He added that “between technological improvements, global store growth and excellent marketing, they are thriving in good times.”
Selecting a “Special” Situation: Restaurant Brands International
The parent company of Burger King, Popeyes and Tim Hortons is a special case as it recently appointed former Domino’s Pizza CEO Patrick Doyle to the position Restaurant brands“Executive chair,” Kramer said.
Doyle ran the pizza chain from 2010 to 2018, during which time it became a formidable force in the restaurant industry. He has joined Restaurant Brands in an attempt to revive Burger King sales in the US.
“If Doyle can accelerate growth without spending insane amounts and improve the taste, I think you have a big winner in your hands,” Kramer said, adding, “Just remember that you have to be patient with it. because it may take some time before Doyle’s plans come to fruition.”
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