Wall Street is overlooking the long-term value of many Club holdings, creating opportunities for investors to buy seven of these “franchise names,” according to Jim Cramer. Jim sees seven companies that currently fall into this camp: TJX Companies (TJX), Caterpillar (CAT), Foot Locker (FL), Starbucks (SBUX), Advanced Micro Devices (AMD), Meta Platforms (META) and Disney (DIS). “Franchise names, doing well, undervalued in the portfolio,” Jim said during the Club’s Morning Meeting on Thursday. “I would buy them.” What turns a company into a franchise? Companies that are well-established leaders in their respective industries with strong competitive moats, and an ability to raise prices without denting their loyal customer bases. These qualities bolster their attractiveness to investors, but they won’t always be fully reflected in the stock prices. For the seven Club names, which Jim highlighted, this happens to be one of those times when the stock price doesn’t tell the full story. TJX 1Y mountain TJX Companies’ 12-month stock performance. Off-price retailer TJX this week announced a double-digit percentage dividend increase — it’s the 26th time in 27 years that the company boosted its quarterly payout. The 13% raise takes TJX’s quarterly dividend to just over 33 cents per share, up from nearly 30 cents. Jim noted, the parent company of T.J. Maxx and Marshalls reaffirmed its plans to spend between $2 billion to $2.5 billion on share repurchases in its fiscal 2024. At the midpoint, that buyback guidance translates to roughly 2.5% of the company, based on its market cap Thursday. Despite the strong capital return program and underlying business strength, TJX shares have been trading roughly 8% below their all-time high of $82.72 each in early January. “I don’t get it,” Jim said. CAT 1Y mountain Caterpillar’s 12-month stock performance. Caterpillar remains perfectly positioned to benefit from the federal government’s major infrastructure investments in the coming years. The machinery maker got hit with a downgrade by Baird on Monday . Analysts at the firm expressed concerns about tighter credit conditions dampening nonresidential construction activity and inventories at Caterpillar dealers. We shrugged off that call Monday, and Jim reiterated Thursday that he still feels that Barid’s premise doesn’t shake our broader investment case. FL 1Y mountain Foot Locker’s 12-month stock performance. Foot Locker is another Club stock that’s not getting its due in this current market environment, Jim said, referencing what we think is a misguided sell call from UBS on Wednesday. Newly installed CEO Mary Dillon, who previously turned around Ulta Beauty (ULTA), is “putting a great franchise together,” he said. Foot Locker is our newest holding, with a 350-share purchase on Monday’s initiation. Had we not been restricted, we would have bought more on Wednesday. SBUX 1Y mountain Starbucks’ 12-month stock performance. Starbucks shares have backed off their…
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