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Why Cramer Favors Chipotle, Starbucks And Wendy's Post-Coronavirus Shutdown

May 15, 2020 8:00 am
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Why Cramer Favors Chipotle, Starbucks And Wendy's Post-Coronavirus Shutdown

The unfortunate and sad reality is the U.S. government needs to step in with new rescue options otherwise small businesses will perish and only "big chains" will survive, Jim Cramer said Thursday on "Mad Money."

What Cramer Said About Big Chains

The coronavirus (COVID-19) pandemic continues to "run rampant" and the U.S. economy as a whole is still mostly shut down. Cramer said for many small and medium-size businesses deemed non-essential, this mostly means their owners' top priority is not to default on debt and avoid getting evicted.

"Take a look around at every business you see on the streets where you live," Cramer said. "Do you know that most of them won't make it unless the government gives us another bailout? I'm not kidding."

A mass exodus of bankruptcies from small-and-medium-size businesses would be akin to an "economic coup by big business," Cramer said.

Why Cramer Likes These 3 Restaurants

Big brands and companies will not only survive the pandemic but be able to wait out the slow reopening of the economy, Cramer said. Most notably in the restaurant sector, Piper Sandler's Nicole Miller Regan said Thursday Chipotle Mexican Grill, Inc. (NYSE:CMG) is likely making the same amount of money today as they did prior to the pandemic.

"They got terrific technology, they can spend, they got a great balance sheet," Cramer said.

Other restaurant picks include Wendys Co (NASDAQ:WEN), whose breakfast rollout is a great success. Cramer also said Starbucks Corporation (NASDAQ:SBUX) might benefit from rent concessions as rent costs are coming down.

Why Cramer Says Invest In These Stocks

Other restaurant chains that don't have a strong takeout capacity or massive global scale will be limited to half capacity and cumbersome health procedures.

Chipotle, Wendys, Starbucks and a very small handful of other retail chains should be bought by investors because consumers will need to eat there because they "have to eat somewhere," he said.

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