Bullish Pet Foods Market
"The mini-bull market in pets and pet foods is still alive and well," Cramer told viewers. That's why he once again welcomed Richard Wolford, chairman, president and CEO of Del Monte Foods (DLM) to the show. Shares of Del Monte are up 10% since Cramer last recommended it on March 9.
Wolford said Del Monte saw opportunity in the pet food business years ago, and realigned its portfolio to acquire more pet brands like Meow Mix and Milkbone. Since then, he said the company has been cutting costs and improving its margins, all while building a great business for the 55 million households that have pets.
Wolford said there are still many ways to innovate in the pet business, such as expanding their product lines to include new products that offer health benefits and better eating for pets. He said Del Monte has lots of room to grow organically.Wolford said overall, Del Monte has had a great year, as more people are eating at home, and foods like fruits, vegetables and tomato products are the perfect fit for a country fighting obesity. He said the ad spending the company has be doing is providing cumulative benefits, and helping to build great brands. Finally, when asked about the company's use of capital, Wolford said Del Monte has been reducing its leverage for the past two years and is now comfortable with its debt level. As a result, it has been able to boost to the company's dividend and stock repurchase program. Cramer said "this stock is so not done," adding it was very cheap.