Jim Cramer Highlights Stocks With Growing Sales and Margins – .

Jim Cramer Highlights Stocks With Growing Sales and Margins – .

CNBC’s Jim Cramer on Thursday highlighted two characteristics that prevail on Wall Street, suggesting that investors can be successful by owning companies that exhibit both.
“It’s extremely hard to go wrong when betting on companies with strong sales growth and rising gross margins,” said the host of “Mad Money”.

These financial attributes are currently sought after by institutional fund managers who oversee large pools of capital, according to Cramer. “Everyone loves revenue growth,” but expanding margins that demonstrate an ability to achieve profitability is also important now, he said.

For example, Cramer said this line of thinking may explain why Nvidia has been on such a tear recently, with shares rising 42.54% in the past month. The semiconductor titan “has the fastest growing revenue and some of the most remarkable gross margins I’ve seen of any major company,” he said.

The retail industry further illustrates the power of increasing sales and widening margins, Cramer said.

Walmart decided to absorb the cost increases, resulting in squeezing margins, and the retailer’s shares struggled Tuesday after posting profits, Cramer said.

In contrast, he said Home Depot and Lowe’s were adopted by investors after home improvement stores reported earnings this week. “They can do nothing wrong because they pass the rising costs on to the public, and the public has no choice, … because these two channels have already single-handedly eliminated the competition,” he said. declared.

While Cramer acknowledged that companies can improve their margins in other ways than just passing on rising material costs, he said this particular strategy is what is currently being rewarded by the market. He said more than anything, Wall Street wants “companies that can make a fortune because they have very little competition, they have tremendous pricing power and they can keep raising prices on you at will”, did he declare.

Register now for the CNBC Investing Club to follow Jim Cramer’s every move in the market. Disclosure: Cramer’s charitable trust owns shares of Walmart and Nvidia.


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