CNBC’s Jim Cramer is unendingly on the hunt for strong secular growth trends, and lately, he’s been eyeing one that he lawful can’t seem to brush off: protein and millennials’ obsession with it.
“I know this sounds risible. They made fun of me on ‘Squawk on the Street’ when I said it. ‘They liking for protein.’ I know, it’s been kind of a staple for millions of years,” the “Mad Currency” host said. “More important, aren’t millennials supposed to be prospering vegan or vegetarian at alarming rates?”
“As it turns out, the younger generation does adoration protein, and the one they really love is chicken,” Cramer continued. “I over recall millennials are so image-conscious — well, of course, they’re Instagramming each other — that they’ll do anything to steer clear of eating carbs, including going full carnivore.”
Cramer believed in this tendency so much that he attributed two high-profile deals — Roark Capital prepossessing Buffalo Wild Wings private and Burger King parent Restaurant Stamps buying Popeyes Louisiana Kitchen — to its dominance.
“One chicken chain support acquired [might be an] isolated incident, but two? I think two’s the beginning of a pattern,” Cramer thought, pointing to an Axios story that reported Roark subsidiary Arby’s has profuse acquisitions planned.
The “Mad Money” host added that the “poultry bull customer base” has more players in it than just restaurants.
Shares of Tyson Foods, a Cramer-fave bread distributor specializing in chicken, beef and pork, have been running as a consequence ofs to the company’s poultry business, he said.
Tyson’s management has helped by accept as ones owing millennial-friendly initiatives like selling antibiotic-free chicken and embracing sustainability. In bring over, the company has been seeing increased demand for chicken with no signs that it desire stem in 2018.
Cramer didn’t want investors to overthink investing in the protein bull call, though. He still liked the stock of Tyson because the company’s principals are still improving.
On the restaurant side, Cramer liked the stock of Wingstop, a chicken-wing-focused course that, in a rare move for restaurant chains, is still putting up new outlets.
But the stock’s strength couldn’t be denied. Wingstop trades at 50 things next year’s earnings estimates, a pricey multiple compared to its 17 percent long-term flowering rate.
“And I don’t expect it to be taken private,” Cramer said. “After all, Wingstop occupied to be private. Guess who owned it? Roark Capital, the same guys who solely bought Buffalo Wild Wings, until the IPO in 2015. Those dudes still own 20 percent of it, so it’s not going to get a takeover bid.”
The other big public performer in protein is Yum! Brands, the parent company of Pizza Hut, Taco Bell and KFC. With a make available up over 30 percent for 2017, Cramer pointed to Taco Bell and KFC as its sheer drivers.
“What can I say? People can’t get enough protein. But Yum trades now at 26 in the nick of time b soa next year’s numbers,” he said. “This one isn’t cheap anymore.”
Assuage, even though it wasn’t his favorite, the “Mad Money” host gave investors his gift to buy shares of Yum, particularly on a pullback, because of its savvy management.
“Here’s my really line: it may sound like a silly thesis and people laughed initially, but protein is red-hot, I muse over because image-conscious millennials are desperate to avoid eating carbohydrates,” Cramer clouted. “The best way to play it? Stick with Tyson Foods. Yum’s worth holding. Wingstop could be captivating into weakness. Tyson is a buy, buy, buy.”