News outside the portfolio has implications for 3 of our stocks

On Apr 13, 2023

First quarter earnings season is about to kick off, and investors should be prepared to be inundated with endless headlines, news stories and analyses — some more useful than others — about a myriad of companies. While our general focus is on the 35 stocks currently in Jim Cramer’s Charitable Trust, the reality is that any investor who wants to stay up-to-date needs to follow the news around the other major companies in the sector in which they’re invested. By listening to what other companies are saying, we can better understand an industry and the potential implications for our holdings, all of which can inform our investment theses. Here are three noteworthy news developments over the past two days, which contain useful insights about our stocks. The news: French luxury goods maker LVMH Moët Hennessy Louis Vuitton reported strong earnings Wednesday, with organic sales up 17% year-over-year, compared with analysts’ forecasts for a 10% increase — propelling shares to a new all-time high . The largest driver of the upside surprise came from its fashion and leather goods division, bolstered by resurgent Chinese buyers. But the perfumes and cosmetics unit was also a strong performer, with organic sales up 10%, compared with a consensus estimate of 7.54%. The bulk of those gains were mainly in Europe and the United States, as Asian travel retail has not fully rebounded from Covid-related restrictions. Still, management had positive things to say about spending habits in China since Beijing abandoned its zero-Covid policy late last year and has been gradually reopening its economy. “We definitely see a normalization of this market with people returning to our stores with the internet business picking up, so we are really back to where we were prior to the complicated period of 2022, so we are extremely hopeful and should benefit from a strong push from mainland China in 2023,” CFO Jean-Jacques Guiony said. The Club’s take : LVMH provides one of the best views into all things luxury, which is particularly relevant to prestige beauty holding Estee Lauder (EL). The main takeaway is that despite ongoing macroeconomic uncertainty, the wealthy are still spending money on luxury and high-priced goods. Estee Lauder’s main overlap with LVMH is around perfume and cosmetics, so it was encouraging to see that overall spending in the category was strong for the French firm — helping explain the pop in EL shares we’ve seen since yesterday. While we would have liked to have seen more positive signs for travel retail — a key growth driver for Estee Lauder — Guiony’s comments make clear that China is poised to rebound across the board, including in travel retail, this year. The news: Danish pharmaceutical group Novo Nordisk (NVO) on Thursday preannounced strong first-quarter results and materially raised its guidance for full-year sales and operating profit growth. In the first three months of the year, the company said sales increased 25% and…