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Why Colgate-Palmolive Is a Tech Company

Don’t think of Colgate-Palmolive as just a soft goods play; instead think of it more like a technology company, “Mad Money” host Jim Cramer said Monday.

“I prefer to think of Colgate as an innovation engine [that’s] constantly reinventing the toothbrush and coming up with all sorts of new products in order to fend off the competition and take market share all over the world,” he said.

While the soft goods space has become a tough business, Colgate has been able to maintain or take share in their various markets thanks to that innovation, Cramer said.

Of course, not everything is perfect — higher commodity costs are a problem. However, Cramer thinks they are baked into the stock.

Right now, Colgate is selling for 16 times next year’s earnings and Cramer thinks it deserves to trade at a premium.

“The non-stop focus on innovation … should drive growth, and therefore the stock price, for many years to come,” he said.

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  • Jim Cramer

    Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

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