Jim Cramer likes these 7 consumer discretionary stocks for 2023

Jim Cramer on why consumer discretionary has underperformed this year

CNBC’s Jim Cramer on Friday offered investors a list of seven stocks he thinks could make great additions to investors’ portfolios.

The consumer discretionary sector is down about 37% for the year. Businesses in this sector tend to suffer during economic downturns as budget-strapped consumers prioritize paying for necessities like rent or groceries over voluntary purchases.

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But “while most consumer discretionary stocks have been horrendous this year, we also had some reserves of power, and many of them can work in 2023,” Cramer said.

Here are his tips:

original parts, O’Reilly Automotive Spirit AutoZone

  • Cramer highlighted these three auto parts stocks as potential buys and stated that AutoZone is his favorite. As used-car prices fall and new-car prices are likely to follow, consumers are more likely to repair their old car than buy a new one next year, he argued.

Ultimate beauty

  • While the company reported solid earnings growth earlier this month and raised its outlook, investors shouldn’t be greedy for the stock, especially if it posts a big profit, Cramer advised.

TJX company

  • TJ Maxx’s parent company, Marshalls and HomeGoods, will benefit from the excess inventory left by the holidays, he said. He added that TJX stock is a winner in times of recession as TJX operates discount stores when consumers tend to trade down.

Delicious! Brands

  • Cramer called the parent company of KFC, Taco Bell and Pizza Hut a great value for consumers.

Starbucks

  • He said he expects Starbucks to make a strong comeback in China once the company’s economy is fully reopened.

Disclaimer: Cramer’s Charitable Trust owns shares of TJX Companies and Starbucks.

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