We recently compiled a list titled Jim Cramer's Top 10 Stocks to Track for Potential Growth. In this article, we will look at where Adidas AG (OTC:ADDYY) ranks among Jim Cramer's top stocks to track for potential growth.
In a recent episode of Mad Money, Jim Cramer points out the surprising strength in the market, noting that many companies are performing better than Wall Street recognizes. He argues that people should stop doubting these companies every time there's a negative data point. Cramer highlights the impressive management and execution by CEOs, which often goes unnoticed.
While Cramer acknowledges that some CEOs deserve skepticism, he emphasizes that many are outstanding and deserve recognition for their hard work. He criticizes the focus on short-term economic indicators and emphasizes that great companies aren't distracted by minor fluctuations.
Cramer explains how Kroger CEO Rodney McMullen has led the supermarket chain to success despite challenges, including resistance to its acquisition of Albertsons and a tough economic environment. McMullen has managed to keep food costs down and deliver strong results through effective strategies like a superior loyalty program and regional store improvements. Despite high food prices, the company's stock rose more than 7% following a positive earnings report, showcasing the company's successful turnaround.
Cramer contrasts this with the tech industry, where complex details often lead Wall Street to misunderstand a company's true potential. He believes that in tech, analysts frequently overlook the expertise and capabilities of CEOs who have a deep understanding of their businesses.
Our Methodology
This article reviews a recent episode of Jim Cramer's Mad Money, where he discussed several stocks. We selected and analyzed ten companies from that episode and ranked them by the level of hedge fund ownership, from the least to the most owned.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A well-dressed woman trying on a pair of shoes in a mono-branded franchise store.
Number of Hedge Fund Investors: N/A
Jim Cramer believes that Adidas AG (OTC:ADDYY) is performing well, along with several other companies, except for NIKE, Inc. (NYSE:NKE), which has been struggling recently. Cramer highlights that while NIKE, Inc. (NYSE:NKE) faces challenges, Adidas AG (OTC:ADDYY) and other competitors are showing stronger performance.
In Q2 2024, Adidas AG (OTC:ADDYY) saw an 11% boost in currency-neutral sales, primarily due to rising consumer demand and better sell-through rates. This resulted in a gross margin improvement of 50.8%, demonstrating Adidas AG (OTC:ADDYY)'s efficient cost management and brand strength.
Additionally, its DDoS business grew by 16%, highlighting steady momentum across key regions. Adidas AG (OTC:ADDYY)'s focus on major sporting events in 2024 further fueled demand, leading to a nearly 19% increase in stock price, reflecting strong investor confidence. With a market capitalization exceeding $46 billion, supported by high-profile partnerships and a commitment to sustainability, Adidas AG (OTC:ADDYY) is poised for continued growth and long-term success.
Here is what Polen International Growth Fund has to say about adidas AG (NYSE:ADDYY) in its Q1 2022 investor letter:
Overall ADDYY ranks 10th on the list of Jim Cramer's top stocks to track for potential growth. While we acknowledge the potential of ADDYY as an investment, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ADDYY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published on Insider Monkey.