Jim Cramer Says Williams-Sonoma's CEO 'Moved a Ton of Manufacturing to Vietnam'
'Laura Alber, CEO of Williams-Sonoma, moved a ton of manufacturing to Vietnam. Her stock's down more than 6% for the year, intriguing. [It] jumped more than 2% on the tariff news, but that's nothing.'
An interior of a modern home with a wide selection of cookware, tools and cutlery on display.
Williams-Sonoma (NYSE:WSM) sells a wide range of home products, including cookware, furniture, decor, and personalized items, through both digital and physical retail channels. Additionally, the company operates a 3-D imaging and augmented reality platform for home design. Vltava Fund stated the following regarding Williams-Sonoma, Inc. (NYSE:WSM) in its Q1 2025 investor letter:
'We sold the rest of the Williams-Sonoma, Inc. (NYSE:WSM) stock. This was a very profitable investment for us. How do we evaluate its feedback? We did not hold the stock for very long, only about 3-1/2 years. During that time, the stock price moved from less than $50 to more than $200. In the beginning, we could buy the shares at single digit earnings multiples. The stock price was well below our estimate of the company's value. The business itself is of very high quality, with high returns on capital, no debt, and an exemplary asset allocation. As such, we see the purchase itself as a good move and entirely in line with our investment philosophy. When we sold the shares, they were trading at about 25 times earnings. This was significantly higher than our current estimate of the company's value. Any company, however good and promising it may appear, is a good investment at a low price but a poor investment at a high price. We are always reminded of this and therefore we sold the WSM shares. So far, we see this also as a good move and entirely consistent with our investment philosophy. At the same time, however, we are aware that the large total return on this investment was only partly the result of our transactions and analysis. Luck also played a large part. We expected that WSM would do well in its business. This was confirmed, and the shares also had been objectively very cheap when we bought them. However, all of this falls far short of justifying the rapid quadrupling of the share price. We therefore do not succumb to the temptation to attribute more to our own skills than is prudent. It remains important for us to stick to our investment philosophy and investment process in our stock selection and individual transactions. On average and over the longer term, they should continue to bring us solid returns, although in individual cases or over shorter periods they may deliver returns both much better than they deserve and much poorer than they deserve.'
While we acknowledge the potential of WSM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.
Disclosure: None.
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