America’s business is a small business, and right now, business is booming, Jim Cramer told his Mad Money viewers on Wednesday.
And while you can’t invest directly in the heart of America, you can invest in enablers – those companies that make small businesses successful.
We heard from two such companies earlier this week, Shopify (STORE) – Get report and Etsy (ETSY) – Get report. Shopify democratizes the business and allows almost anyone to quickly set up an online store. Meanwhile, Etsy connects 4.7 million individual and small business sellers with buyers around the world. How do these two compare as investments? Shares of Shopify were up 4,700% over the past year, and Etsy was up 2,000% over the same time period.
Then there is Square (SQ) – Get report, the small business payments platform that is fast becoming the perfect small business lender as the business already knows exactly how much business it is generating. Square’s shares have risen 2,000% in the last five years. Other small business enablers include Wix (WIX) – Get report and Adobe Systems (ADBE) – Get report.
Some names you might not think of when it comes to small businesses are Ford Motor (F) – Get reportwhose light trucks are the workhorses of small businesses. There is also Facebook (full board) – Get report for advertising, American Express (AXP) – Get report and Apple (AAPL) – Get report for your favorite small business devices.
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Heading back to school
The consumer economy is booming. That’s why Cramer reached out to Adrianne Shapira, former managing director and retail analyst at Goldman Sachs. (GS) – Get report and the current managing director of Eurazeo Brands, for an update on the upcoming back-to-school shopping season.
Shapira said that retailers across the country are gearing up for what promises to be a monster back-to-school season, with kids and parents needing new clothes, gear and supplies to get back to work and school. It highlighted Herschel as a lifestyle brand that is capitalizing on the trend. He said the brand has focused on both product innovation and speed to market to deliver new products faster than ever.
One of Herschel’s new product lines includes insulated bags, backpacks and lunch boxes that are perfect for summer getaways, back to school or back to the office. The new line is the company’s first direct-to-consumer product, ensuring they can be delivered as quickly as possible.
Can Chipotle deliver?
After trading sideways for the better part of five months, there is restaurant stock that is now a coil spring ready to jump higher. That broth is Chipotle Mexican Grill (CMG) – Get report.
Chipotle has been one of the biggest winners from the pandemic because it was one of the pioneers in large-scale mobile ordering. But as shareholders got used to perfection, the stock fell as the company posted less-than-perfect results earlier in the year.
After bottoming out in May, Chipotle’s population has been rising steadily. Food prices have started to decline and the company was able to push a 3% to 4% price increase for customers to offset rising labor costs.
With much less post-pandemic competition, Cramer said Chipotle shares could rise much higher. The stock is currently trading at 63 times earnings, but Cramer noted that earnings estimates continue to rise, making the stock a real bargain.
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At the time of publication, Cramer’s Action Alerts PLUS had a position at FB, AAPL.