Starwood Hotels (HOT) and Target (TGT) are two retailers that are both poised to break out given compelling strategic optionality, fundamental strength and valuation upside. Action Alerts PLUS Portfolio Manager Jim Cramer and Director of Research Jack Mohr discuss why they are buyers of these respective retailers. Starwood is benefiting form a favorable supply/demand dynamic in the U.S. and the organic global growth in travel, which supports its large international exposure long-term. Meanwhile, Target reported solid Q1 results on Wednesday, a bright spot in a somewhat dismal retail earnings season thus far. In our view, the results confirm that TGT’s turnaround is off to a strong start, with potential incremental upside from a number of areas this year, including continued outperformance of higher-margin signature categories, incremental sales from relatively new omnichannel features like ship from store and store pickup, and greater-than-expected sales of licensed merchandise from key movie releases like 'Avengers' this month and 'Star Wars' in December.
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