Jim Cramer Weighed In on These 11 Stocks

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9. Chewy, Inc. (NYSE:CHWY)

Number of Hedge Fund Holders: 58

Chewy, Inc. (NYSE:CHWY) is one of the stocks Jim Cramer weighed in on. Cramer discussed the company’s earnings and analyst upgrades following it, as he said:

“What on earth happened this quarter that crushed the stock but simultaneously made two analysts feel confident enough to upgrade it? Okay, at first glance, this was a very good quarter… I don’t think the higher SG&A expenses were the real problem. In the end, this was about expectations. Most of Chewy’s numbers came in higher than the consensus analyst estimates, but they didn’t come in higher than the so-called whisper number, which is what the really bullish hedge funds were looking for…

Deutsche Bank and Seaport both upgraded it last Thursday because the stock suddenly got too cheap and the story is too good to ignore, which is one reason why it came roaring back today… Chewy put up 8.6% revenue growth in an industry that’s only been growing in the low to mid single digits. I mean, these guys are taking market share… On the conference call last quarter, management likened the subscription service to Amazon Prime or even a Costco membership. You know how much I like that? The value proposition here is just that good. Aside from the $49 annual subscription fee, Chewy+ members tend to spend a lot more time on average than non-members using Chewy. So they naturally want to sign up as many people as possible. I really like this…

So here’s the bottom line: I think it’s crazy that Chewy sold off over 16% in response to a largely good quarter. I think the two analysts were right to upgrade the stock last Thursday, and the buyers were right to step in today. So even though Wall Street’s not happy about all that Chewy spends on growth initiatives, call me on board. This will make Chewy a better investment long term. You have my blessing to buy it even after the rally it just had today.”

Chewy, Inc. (NYSE:CHWY) operates an online platform and it provides pet food, treats, supplies, medications, and health products.

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