Cramer: Street Developing Appetite for These Stocks
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Last year the group caused indigestion. But that was last year, said Jim Cramer.
The Mad Money host was talking about restaurant stocks – especially those with big domestic exposure.
In fact, Cramer thinks the market is about to embark on newfound appreciation for this group. That's because they're highly leveraged to consumer sentiment and a willingness to indulge on a smaller scale.
And that's a theme that Cramer thinks is very much alive and well in the USA.
Here's why.
Cramer believes as the stock market advances and as home prices inch higher, Americans are becoming incrementally more optimistic. "We are a richer country than people realize, particularly when our houses go up in value and our stock market goes up in value," he said.
As a result, he expects spending to tick higher.
Although there are many beneficiaries from increased consumer spending, Cramer thinks restaurant stocks are particularly attractive because they've lagged.
"Right now the market wants to embrace stocks that have underperformed as opposed to many of the first quarter winners, which may be overbought," he said.
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And the Mad Money host added that he's far from alone in his bullish outlook on this group; major research firms confirm his thesis.
"Yesterday Raymond James said that, after a hiatus it is time to buy Panera," Cramer explained. "Today Goldman said that Panera and Brinker – the owner of Chili's should be bought. The same Goldman research piece also said that Starbucks is more popular than ever."
"I think these upgrades are going to look very smart a few months from now," Cramer said. "We are a nation of spenders, and going out to dinner's always been in our DNA."
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