High oil prices are pushing up costs for Kimberly-Clark because it uses petroleum to make the diapers the company sells. But CEO Thomas Falk told Erin Burnett in an interview earlier Thursday that he’s able to pass those costs on to consumers, she said.
Typcically, stocks like KMB should be bought when raw costs are high – and the stock prices are, as a result, down – because there’s usually the assumption that business will soon improve, Cramer said. He recommended investors think of KMB as a longer-term investment, playing out over 18 months.
A more positive aspect to KMB might be the company’s overseas prospects, which account for 40% of business.
As for other stocks in the sector, Cramer said he’s bullish on Colgate-Palmolive and Avon. He’d steer clear of Clorox, though, because the company’s executing so poorly.
Watch Maria Bartiromo interview Procter & Gamble CEO Alan Lafley.
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