Comparing stock performance to 2020 is, well, so 2020.
Instead, Jim Cramer said the better barometer is 2019, when nobody was concerned about COVID-19, government lockdowns, rampant inflation and the Taliban running Uncle Sam out of Afghanistan on a rail.
“Remember when we divided companies into those that could thrive in a COVID environment and those that would falter? It turned out to be a surefire way to make money with companies like Zoom ZM and Clorox CLX seeing extraordinary growth and concomitant stock price accumulation,” Cramer wrote recently on Real Money.
As Cramer puts it, those days are long gone. “We now have a new standard: right now - is the company now doing better than it did in 2020? Almost all those comparisons were matched up because of the shutdowns,” he wrote. Yet in 2019, a year that was of the halcyon variety when everything was going right not wrong with the world, comparisons against 2021 provide more clarity.”
Aside from Zoom and Clorox, who made hay from people staying home and cleaning in 2020, Cramer looks back to 2019 and sees several stocks that have lifted shareholder spirits two years later. They include Chipotle (CMG) - Get Chipotle Mexican Grill, Inc. Report, DoorDash (DASH) - Get DoorDash Report, and DocuSign (DOCU) - Get DocuSign, Inc. Report.
Cramer said there is one stock that rules the 2019-to-2021 timeline however, and it has quite a story to tell.
“As amazing as all of these are, I think we have found the winner and new champion when it comes to crushing 2019 numbers: Lululemon (LULU) - Get Lululemon Athletica Inc (LULU) Report,” Cramer wrote. Recently “the company reported a quarter that was 64% better than 2019 with expanding gross margins and impressive invention and share take. LULU management is saying they are in the "early innings" of growth and even though the company is no longer a wunderkind, call me a believer."
Cramer cites two factors fueling LULU to new heights.
First, the company’s market expanded as Americans began to work at home and then, in some cases, returned to the office. That’s important, as LULU’s clothes, comfortable and fashion-forward, can be worn in both environments.
Second, short sellers thought that growth would be curtailed when people returned to the office. In late 2021, employees are trickling back to the office but they are still in their LULU clothes. That's led to a short squeeze of tremendous proportions and Cramer doesn’t think it is over.
“So when we look at companies, particularly growth companies in tech and retail, remember to ask yourself not how they did versus 2020, but how they compare to 2019,” Cramer said. “The numbers are eye-opening and the subsequent performances bountiful.”