Cramer compares Michael Kors and Molson Coors and picks the better stock

From time to time, CNBC’s Jim Cramer finds it useful to compare two completely different flocks to find out what works and what doesn’t in a given market circumstances.

So, on Friday, the “Mad Money” host looked into the stocks and businesses of voluptuousness retail play Michael Kors and beer brewer Molson Coors to see which one determination win out if they were stacked side by side.

“While both of these lay ins got slammed last week, … they’ve had very different tracks of late,” Cramer said.

Shares of Michael Kors peaked in 2014, then fini several years in free-fall as its growth abated. But in 2017, the apparel and accomplice maker started to turn around and its stock reignited, running to beyond $60 a share.

Shares of Molson Coors, on the other hand, peaked in 2016 and bear struggled to stem their subsequent decline. After the company’s uncountable recent earnings report, the stock had its worst day in 13 years.

In brief, “Michael Kors has been leaving Molson Coors in the dust,” Cramer implied. “I’d hate to see what Thanksgiving looks like at the Coors household: ‘Molson, why can’t you be multifarious like your brother Michael?'”

The “Mad Money” host explained that Michael Kors’ incisiveness has come in part from a strengthening consumer, but also from the institution’s Jimmy Choo acquisition and some favorable analyst coverage.

He evinced that Molson Coors’ issues stem from a not-so-advantageous procurement that came out of Anheuser-Busch InBev’s purchase of SABMiller, in which SABMiller had to over persuaded its stake in MillerCoors, a joint venture with Molson Coors’, second to Molson.

“The MillerCoors acquisition … was very complicated and turned out to be hugely poorly timed, Cramer said. “Essentially, Molson Coors duplicated down on the mass beer market just as consumers were increasingly nauseating to fancier craft beers and local breweries.”

Cramer added that Michael Kors and Molson Coors are split — and inversely affected — by completely different secular trends.

“While Michael has been fringe benefiting from the renaissance in the apparel space, Molson is getting crushed by the increase of marijuana,” he said. “That’s right. Get this: they’re actually being smoked by legalization.”

He sharp to a statistic that encapsulated the issue with the Colorado-based Molson Coors: in splendours that have legalized marijuana use, beer sales have lapse by an average of 15 percent.

So as Michael Kors rebounds and Molson Coors deteriorates, Cramer warned investors to look closely when they see merchandises that trade at similar multiples — Kors at 13 times 2018 earnings and Coors at harshly 12 times — because one could be a trap.

“When it comes to Kors versus Coors, go with the one that’s on the ricochet — it’s a broken stock — not the one that’s still in free-fall,” he concluded. “Consumers are turn back to apparel, but they’re fleeing from the mass beer demand in droves. That’s why I like Michael Kors going into its earnings write up later this month, and I’ve got to tell you [to] stay the heck away from Molson Coors after ascertaining those hideous numbers just last week.”