Purchase 50 shares of Estée Lauder stock at approximately $134.50. Following the transaction, the Jim Cramer Charitable Trust will own 525 shares of EL stock, increasing its stake from 2% to 2.2%. Some recent data from China has given us an increasingly good feel for the position in this battleground. First, China announced late Friday that its consumer price index rose 0.3% year-on-year in April, beating expectations for a 0.1% rise and accelerating from a 0.1% rise in March. Consumer prices also rose for the third consecutive month. Although these are small steps, rising CPI could be a sign that demand for goods in the region is starting to recover again. The second data point is Alibaba’s earnings release on Tuesday. Executive Chairman Joe Tsai said the company is starting to see some green shoots in consumer spending on discretionary goods. Tsai said headwinds continue, noting that the weakness in the real estate sector makes it difficult to get a clear reading of the macro environment. But he reiterated that there are “some early signs” of consumer confidence. This last part is our main point, as we all know that Chinese consumers are weak, but Estée Lauder’s weak share price may not reflect an improvement. Estee’s stock price fell 13% after its May 1 quarterly report. This was unfair punishment for companies that reported lax guidance for what should have been low expectations, even though profits were significantly higher. This guidance may have been too conservative as inventory normalizes and profit recovery plans improve margins. Thanks to Clinique’s launch on Amazon, its market share in the US should also improve further. China is still a wild card and, as mentioned earlier, this position is riskier and more volatile, but it is becoming more optimistic at these prices. (Jim Cramer’s Charitable Trust is Long EL. See here for a complete list of stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. I will receive it. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in a charitable trust’s portfolio. If Jim talks about a stock on his CNBC TV, he will wait 72 hours before executing the trade after issuing a trade alert. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
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We’re adding to this battleground position on positive data from China
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