Jim Cramer shared his insights on the recent change in leadership at Starbucks Corp. (NASDAQ:SBUX) and how it affects conventional investment strategies.
What Happened
During an episode of CNBC’s “Mad Money,” Cramer discussed the transition from CEO Laxman Narasimhan to Brian Niccol, previously the CEO of Chipotle Mexican Grill (NYSE:CMG). He highlighted this leadership change as a key reason behind the company’s recent stock increase.
Cramer expressed concern about the idea that abandoning value investments is a mistake, stating, “One thing you really dislike is when a guideline meant to enforce discipline ends up costing you money.”
He emphasized that since the late ’80s, he has believed that if you see a company’s brand as valuable, you should strive to “keep it on your sheets”—a typical Wall Street phrase for holding onto the stock.
Cramer noted that the market had lost confidence in Narasimhan and described his management approach as “consultant-like.” He believes that the new leadership has revitalized investor optimism regarding the company’s future.
While Cramer acknowledged potential challenges Niccol may encounter, particularly due to the significant influence of Howard Schultz, the company’s founder and major shareholder, he remains optimistic about Niccol’s capability to guide Starbucks effectively.