In this article, we will look at Lower Interest Rates Ahead? Jim Cramer on the Macro Setup, FedEx, and 4 More Stocks. Please visit Lower Interest Rates Ahead? Jim Cramer on the Macro Setup, Alphabet, and 27 More Stocks, if you’d like to see the extended list and methodology behind it.
5. Paychex, Inc. (NASDAQ:PAYX)
Paychex, Inc. (NASDAQ:PAYX) was among the stocks Jim Cramer discussed as he said that the Iran peace negotiations could trigger an oil glut, cool inflation, and pull interest rates down. Cramer highlighted the AI worries around the stock, as he said:
Paychex reports in the morning and their quarters have been poorly received of late, even as the company’s a consistent beat and raiser. When I see that pattern, you know what I think? I presume that the industry could be disrupted by AI, even if I can’t get my head around how. I’ll say this, though, like Intuit, like Adobe, like ServiceNow, like Salesforce, Salesforce, ouch, 13 days down in a row, I’m not going against the zeitgeist here. I’m not going to fight the tide.
Paychex, Inc. (NASDAQ:PAYX) provides human capital management solutions, including payroll processing, payroll tax and compliance, HR administration, benefits, and workforce management for small to mid-sized businesses. Cramer discussed the company during the March 26 episode. He commented:
I’m calling it the macro morass. That’s what we’re experiencing right now with so many not-so-hot stocks of very good companies. Case in point, two companies that we heard from during yesterday’s show, Paychex and Generac. Let’s take them one at a time so I can show you how the macro morass affects you and me. John Gibson is the eloquent CEO of Paychex, a no-nonsense representative of a payroll processor that’s been on the show virtually since we went on the air. Told a story of strong growth with a terrific acquisition of Paycor, which has helped them beef up their medium-sized business offerings.
John emphasized that, despite what you might think, business is very strong, with a portion of the economy that is doing very well. Small and medium-sized businesses are Paychex’s bread and butter. They’re also the backbone of the economy, and they’re much less hostage to problems overseas. Well, the people are still hiring, and that’s Paychex’s bread and butter. The stock itself seems quite fetching given its better-than-expected quarter. Paychex sells at a reasonable price to earnings multiple of 17, used to be much higher. Spectacular 4.6% dividend. Sounds great, right?
But let me give you the bear case. The economy’s slowing. You can’t buy a payroll processor in a situation where the economy might end up in a recession. It has a price-to-earnings multiple of 17, but so what? It used to be 30. Why must it stop at 17? How about 15? Its yield is at 4.6, yeah, but can it go to 5? Sure. That’s the macro morass. It takes everything Gibson said and stands it on its head, which makes the stock overvalued even as it’s pulled back from $161 to $93. I think the macro morass is absurd. This should be a great stock to match the great underlying company, but I see no catalyst that can put them together. So I succumb to the zeitgeist myself. I hit the don’t buy button. It’s finished up 23 cents today, [don’t buy, don’t buy].
4. Casey’s General Stores, Inc. (NASDAQ:CASY)
Casey’s General Stores, Inc. (NASDAQ:CASY) was among the stocks Jim Cramer discussed as he said that the Iran peace negotiations could trigger an oil glut, cool inflation, and pull interest rates down. Cramer was bullish on the stock due to the upcoming analyst day, as he remarked:
One of my absolute favorite companies, as you may know if you watch the show closely enough, is Casey’s General Store. It’s got an analyst day on Wednesday, and most of these meetings really don’t move stocks. I think this one actually could because people still don’t know the Casey’s story, the small city model. I bet they have some of those delicious breakfast pizzas, too.
Casey’s General Stores, Inc. (NASDAQ:CASY) operates a chain of convenience stores that offer freshly prepared foods such as pizza, donuts, and sandwiches, along with motor fuel, tobacco products, beverages, and other household and automotive essentials. A caller inquired about the stock during the June 16 episode, and Cramer replied:
Yeah, you know, we really, really like Casey’s, and sometimes, I see stocks like this and that dip was made to be bought… Let’s do this. I think you buy 25 shares. Let’s say you want to have 50 shares, maybe you buy 10 here and then let it come down because it is an $865 stock. And remember, when you have a stock at $865, divide it by 10. Think of it as an $86 stock and try to get some more when it hits $80.
3. KB Home (NYSE:KBH)
KB Home (NYSE:KBH) was among the stocks Jim Cramer discussed as he said that the Iran peace negotiations could trigger an oil glut, cool inflation, and pull interest rates down. Cramer called it a “well-run home builder,” as he stated:
I’m acutely focused on housing, as you know, because it punches above its weight. It’s a big part of the economy. So I’m going to make time to listen to the conference call of KB Home. That’s a well-run home builder that tells it like it is, very abject conference call. I sure hope they make some references to the Federal Reserve. The housing industry just feels like it’s dead in the water right now. There’s just not enough supply and not enough new homes.
Why should there be though with interest rates as high as they are? Why would a home builder step up to the plate? It’s really only Toll Brothers who can handle the situation. That’s because about a quarter of their homes are bought with cash.
KB Home (NYSE:KBH) builds and sells homes for various buyers and provides related financial services, including mortgage, insurance, and title services.
2. FedEx Corporation (NYSE:FDX)
FedEx Corporation (NYSE:FDX) was among the stocks Jim Cramer discussed as he said that the Iran peace negotiations could trigger an oil glut, cool inflation, and pull interest rates down. Cramer noted that the company is a “juggernaut under Raj,” as he commented:
After the close Tuesday, we get results from FedEx. Now, I’ve been telling everyone to buy this one. We just came back from Memphis, not that long ago, where I spoke with CEO Raj Subramaniam. We liked the stock enough that we told CNBC Investing Club members to go buy some, which is exactly what we did for the Charitable Trust.
FedEx tends to give very conservative guidance when it reports. So if you see a big earnings number and then the stock sells off from the forecast on the call, it might be a terrific buying opportunity for you. The company, always well-run under the late Fred Smith, a great friend of mine, is now a juggernaut under Raj. I think you just own FedEx for the long haul as it’s winning in the trenches against long-time opponent UPS. Buy it, put it away.
FedEx Corporation (NYSE:FDX) provides transportation, shipping, and logistics services, e-commerce solutions, and supply chain management.
1. Carnival Corporation & plc (NYSE:CCL)
Carnival Corporation & plc (NYSE:CCL) was among the stocks Jim Cramer discussed as he said that the Iran peace negotiations could trigger an oil glut, cool inflation, and pull interest rates down. Cramer called it “pretty lucrative,” as he remarked:
Not a lot of corporate news next week, but still enough to parse. One of the more ridiculous elements of stock research is the endless pecking order shifting in the cruise lines. You know, I’ve been consistent. I like Viking because of its upscale model, okay, no kids, no gambling. But I recognize that all the cruise lines are well-run. When Carnival reports, we might get our first inkling of what their future looks like with lower fuel costs, and perhaps more important, what actually happened with fuel and with destinations that were deemed off limits. Remember, [of] all the cruise lines, Viking has the best pricing power, but they can all generate really good fares. Carnival’s been pretty lucrative. Never told anyone not to buy it.
Carnival Corporation & plc (NYSE:CCL) runs cruise lines and offers vacation trips. The company also manages ports, hotels, lodges, and tours that support its cruise business.
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