Halved' by Rotation Shock...Jim Cramer: "Buy Quality Consumer Stocks like Starbucks Now"

▲ Johnson & Johnson (JNJ), PepsiCo (PEP), Starbucks (SBUX), Consumer stocks, US stocks/AI-generated image

A diagnosis has emerged that some US consumer stocks, pushed down by the rotation shock, have been oversold. Jim Cramer assessed that the sharp decline in stock prices stemmed from market fund movements rather than issues with the companies themselves, opening up buying opportunities for quality consumer stocks.

Jim Cramer, host of CNBC's 'Mad Money,' stated on the broadcast on July 7 (local time) that "if you catch the rotation and understand the market's themes, you can find amazing discounted stocks." Cramer named Johnson & Johnson (JNJ), PepsiCo (PEP), Starbucks (SBUX), Constellation Brands (STZ), and TJX Companies (TJX) as buy candidates pushed down by the rotation shock.

Starbucks stock fell over $2 in a day, dropping to $102 and trading at $100 at one point. Cramer emphasized that opportunities to buy the stock at a low price have been rare while Starbucks CEO Brian Niccol is working to normalize operations. As Dutch Bros (BROS) plunged 5.6%, he told investors willing to take risks that they "could start a position."

Constellation Brands fell about $7 that day, dropping to the $130 range. Cramer noted that the quarterly results announced last week showed signs that the beer business, in particular, was nearing a bottom, stating, "There was enough to say that earnings had bottomed out." He added that the stock price has fallen to half its past level and has a dividend yield of 3%, declaring, "At this price, it's really cheap."

TJX Companies fell below $140 early in the session before rebounding, but closed trading around $151, about $3 lower than the previous day. Regarding the stock price, which had fallen $20 from its peak, Cramer said, "Such advantageous positions to buy high-quality stocks are very rare." He also cited as strengths the increasing demand for low-priced goods during a consumption slowdown and the ability to acquire excess inventory from struggling retailers at low prices.

Cramer noted that TJX management mentioned significant excess inventory in the market during their recent earnings announcement. He stated, "Johnson & Johnson, PepsiCo, Starbucks, Constellation Brands, and TJX all took a big hit today," adding, "As these stocks are collateral damage from the rotation, I see them as good buying opportunities."

[Article Key Summary]

-Jim Cramer named quality US consumer stocks, pushed down by the rotation shock, as low-price buy candidates.

-Starbucks traded at $100 at one point, while Dutch Bros fell 5.6% and Constellation Brands dropped about $7.

-Cramer assessed that TJX, down $20 from its peak, has strengths in consumers' preference for low-priced goods and in acquiring excess inventory.

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