Cramer's 'Mad Money' Recap: Sale on Kroger
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The main challenge for many investors is to find stocks that are good investments even though the market has had a big run, Jim Cramer told viewers of his "Mad Money" TV show Thursday.
There are not a lot of stocks he can call cheap, Cramer said, but luckily for his viewers, he's found a sale in the supermarket stocks. A few of the supermarket plays deserve to be cheap because some are falling apart and shouldn't go higher anytime soon, he said. But there's one that's cheap and good."My supermarket of choice is Kroger (KR)," Cramer said, calling the stock a "serial outperformer." Kroger's earnings per share not only came in 4 cents above average, but the company also raised guidance. This is not what the Street expected, he said. Market players thought the supermarkets were in trouble because of inflation and competition. But inflation is under control, Cramer said. And Wal-Mart's (WMT) strategy is "failing" because no one wants to shop at a big-box retailer for food, he said. Kroger is going head to head with Supervalu (SVU) stores, and while Supervalu looks cheaper, it is "a value trap," Cramer said. Supervalu's future value is declining. Meanwhile, Kroger is "firing on all cylinders" with an improved presentation and more upscale products, he said. Plus, the company bought back 3% of its shares outstanding last quarter and it has better than expected margins and they expect them to go higher, Cramer said. "That's not something you want to miss."
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