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Buy & Hold Investors: This Stock’s For You

Wednesday, 6 Feb 2013 | 6:26 PM ET
When to Buy McCormick
As consumers move away from packaged foods and cook at home more, McCormick is a terrific company that dominates the spice business, says Mad Money host Jim Cramer.

Who says buy and hold is dead? There's at least one stock that seems to do nothing but slowly power higher.

Over the last ten years, this stock has increased 180%; it's returned 246% over the same period with reinvested dividends. In the last twenty years, the stock has gained 373%; and returned a whopping 632% with reinvested dividends.

"Certain stocks are like machines that consistently trade higher, year after year after year," said Cramer And McCormick is one of them.

Part of the slow and steady growth comes from the company's strong position.


"Whether it's Safeway, Kroger or one of the many other supermarkets across the US, McCormick has huge market share as well as prime shelf space. In addition they have a big presence in Europe, the Middle East and Africa and a rising presence in the rest of the world," Cramer said.

"And if you buy private label, you're buying McCormick, too, as the company controls roughly 50% of the domestic market for private label spices and seasonings," he added.

Also, Cramer feels that McCormick is well positioned as consumers move away from packaged foods and do more home cooking,

All told, Cramer suggested this stock as a 'buy, buy, buy!'


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However, Cramer also said you have to plan your entry points well, otherwise you may find yourself waiting for pullbacks that never come.

Fortunately for bulls, a pullback has come.

"See, McCormick's quarterly report was widely viewed as disappointing—the company missed the Street's earnings estimates by 3 cents off a $1.14 cent basis, its revenues were also worse than expected due to weaker volume. And their full year guidance for 2013 was below what Wall Street was looking for," said Cramer.

"As a result, the stock got hammered, falling from $66.59 to $62.37 in just twenty-four hours, a vicious 6.3% mauling. And though two weeks have passed, McCormick is still down in the dumps."

And that's a great thing! -- Huh?

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"I think you're getting a terrific entry point right here, with McCormick at $62 and change," he said.

In other words, don't get spooked by the earnings report. Cramer said with this company, history is on your side. That is, their products are just the opposite of fad products. They're time honored.

"Believe me, spice has staying power—just ask the Hudson Bay Company, or Marco Polo for that matter. Long-term this business has been a winner for centuries."

Therefore Cramer concluded, "I think you have to buy McCormick whenever you get this kind of pullback because, it seems to me, the only time this stock ever sells off. Otherwise it seems to be on a never-ending rally."

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

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