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Cramer's 'Mad Money' Recap: Retail Fire Sale

08/27/07 - 07:53 PM EDT

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TheStreet.com Staff
TheStreet.com Staff

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"I don't think anyone's been more negative about retail than me," said Jim Cramer on his "Mad Money" TV show Monday.

Cramer has been telling viewers to "avoid retail at all costs," because retailers have been as hated as homebuilders and brokers.

However, he said, "things change when the Federal Reserve changes." In turn, it is time to start looking at retailers.

Cramer has changed his mind about Gap (GPS - Cramer's Take - Stockpickr), a stock that was "so loathed, so hated, so incompetent," he said. He likes that the stock has an improved balance sheet and a new CEO. The company carries $2.7 billion in cash and investments and only $514 million in debt. Gap reported revenue of $151.9 billion in fiscal year 2006.

On the inside, Gap announced a $1.5 billion stock buyback. In addition, Cramer likes new CEO Glenn Murphy and what the company is doing to improve the Banana Republic brand.

Cramer called the company undervalued and a "great turnaround story in a sector that is turning." While Gap is a "best-of-breed retailer," Cramer said that buying it this week will lose you money because you will be early.

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At the time of publication, Cramer was long Freeport McMoRan.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."

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