Sweetgreen inventory is ‘a recipe for portfolio destruction’

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CNBC’s Jim Cramer on Tuesday warned traders to not put money into Sweetgreen, saying the inventory is unlikely to carry out effectively in an inflationary surroundings.

“This can be a bear market, not a bull market. …  In a bear market, you don’t stick your neck out to choose at hated shares,” he stated.

“Proper now, Wall Road loves earnings, money stream, dividends. Sweetgreen’s bought none of this stuff. You are combating the [Federal Reserve] and the tape in the event you attempt to backside fish on this one, and that is a recipe for portfolio destruction,” the “Mad Money” host added.

Cramer did not mince phrases when laying out why he believes the corporate’s inventory is uninvestable. He reminded viewers the corporate’s expensive salads are unlikely to promote in an inflationary surroundings. 

The potential for a recession or a brand new Covid-19 variant additionally makes him cautious of the inventory, he added.

“Sweetgreen’s an unprofitable development story. …. I informed you to keep away from this inventory when it got here public. Advised you once more to keep away from it in December, when it was buying and selling at $33. Nothing that is occurred within the final six months has made me change my thoughts,” Cramer stated.

Shares of Sweetgreen fell 2.3% to $11.86 on Tuesday.

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