Cramer trade ripped from the headlines, literally
Published Wed, Feb 26 20146:14 PM EST
Lee Brodie@lee.brodie.77@LeeBrod
Jim Cramer scours the newspapers everyday looking for investment ideas. On Wednesday he landed on something from the New York Times.
"Right on the front page I read 'Obesity Rate for Young Children Plummets 43% in a Decade,'" Cramer said.
Specifically, the article profiled a study of children 2 to 5-years-old, a time of life when eating habits are largely formed.
"This is considered the most significant age group, as it is in those years that obesity — and all the disease risk that comes with it — becomes established, and it is later very difficult to shake, said Dr. Jeffrey P. Koplan, a professor of medicine and public health at Emory University in Atlanta" in the Times article..
Immediately Cramer knew he was onto something.
Bhaskar Dutta | Flickr | Getty Images
Although the article examined a wide range of catalysts behind the developments, Cramer focused on one in particular.
"In part, the reason for this decline in early childhood obesity is that young parents of these young kids are extremely conscious about what's wrong with the food chain in this country, so they're more careful about what they feed their children," Cramer said.
In other words not only are young people choosing to eat organic and natural foods, now they're having children and teaching them to do the same.
Cramer calls the phenomenon the 'healthy eating theme' and he believes it should remain investable theme for many years to come.
If you're interested in putting money behind the theme, Cramer also said that some stocks including Whole Foods, Hain Celestial, and The Fresh Market may be facing some headwinds in the near-term.
"However, there's been one terrific standout in the group, a company that managed to overcome the weakness in the rest of the sector," Cramer explained. "It's WhiteWave Foods, the maker of organic milk, coffee creamers, and especially non-dairy alternatives like soy and almond milk based products."
Cramer finds recent earnings impressive.
"The company delivered a 2-cent earnings beat off of a 20-cent basis, with higher than expected revenues that rose 11.5% year over year and expanding margins."
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Combine that strength in execution with the long-term theme of healthy eating and the impressive leadership of CEO Gregg Engles and, "although WhiteWave has rallied 65% since it came public in October of 2012 I would not be surprised if it's got more room to run," Cramer said.
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Whole Foods Market Inc
The Hain Celestial Group Inc
Fresh Market Inc