On Wednesday, Jim Cramer told viewers of his Mad Money TV show that he sees value in industrials, and that they show greater fundamentals than he sees for consumer staple and high-multiple Internet stocks.
Cramer also noted that stocks like Toyota (NYSE:TM) and the Baltic freight index were acting positive, technically. He argued that since the Japanese earthquake, industrial stocks have suffered while consumer staples have gained. He believes some of the staples are now priced to perfection and noted that the rise in commodity prices is a big negative to a consumer staple like Procter & Gamble (NYSE:PG).
The reality of this call by Cramer appears to indicate his belief that agricultural commodities will outperform industrial commodities. He appears to believe that increased costs for industrial metals such as steel and aluminum will not keep pace with agricultural and/or petroleum prices.
This distinction is one that many contrarians have believed is a long time coming. Prior to the recent move in many agricultural commodities, several were at or near all-time lows when adjusted for inflation. The costs of food and products sensitive to agricultural commodities will likely be under pressure for a while. For example, many coffee brands have increased prices significantly over the past year.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.