The stocks that thrived during the height of Covid-19 have lost momentum, but CNBC’s Jim Cramer said Monday that not all pandemic winners should be branded as reopening losers.
“If your company made a killing during the pandemic, it’s become toxic in this market, even if business is still booming,” the “Mad Money” host said. “That could create some buying opportunities, but only if you’re very patient and willing to take some pain.”
Some of those buying opportunities exist in stocks of companies connected to the outdoors lifestyle, including recreational vehicle manufacturer Thor Industries and boat maker Brunswick, Cramer said. Shares of Thor and Brunswick are down 29% and 18.7%, respectively, from the 52-week highs reached earlier this year as the economy recovers from last year’s lockdowns.
Some investors worry that consumers will leave behind Airstream campers and Mercury boats for hotel stays and air travel. The deep backlogs and lasting high demand for Thor and Brunswick products, however, paint a different business case, Cramer said.
“Covid didn’t just give them a temporary boost; it was a long-term gamechanger,” he said. “The bears are convinced that there’s no way business can stay this good, hence the ever-shrinking price to earnings multiples on great numbers.”
Campbell Soup is another underperforming stock Cramer highlighted. The stock, he noted, tanked earlier this month after it missed quarterly estimates and had to slash its forecast. Despite that hiccup, the snacks and food producer has taken market share, he added. The stock is more than 13% off its January high.
Disney, which stands to benefit from the return of theme parks and movie theaters, has a what Cramer called a “broken stock.” It’s down about 14% since March partially because investors are focused on the slowing growth rate in the company’s video streaming platform, Disney Plus.
“I think [CEO Bob] Chapek can turn things around, but he has to avoid the trap of Disney Plus becoming another ESPN, which dragged the stock down for years after their numbers peaked,” Cramer said. “Chapek needs to remind people that the rest of the company exists and is perfectly poised for the great reopening.”