Jim Cramer -- Walmart Is Leading the Rebound in Retail
Amazon's (AMZN) - Get Report Prime Day is set for Tuesday, July 12, when the company will unleash a flurry of attractive deals for its Prime members. So what's Walmart (WMT) - Get Report going to do in response? Free shipping this week.
"Walmart has been an amazing stock," said TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, on Tuesday from the floor of the New York Stock Exchange.
"Walmart offers a bargain," which is good for frugal customers, he said. Because the company set the bar so low when, in 2015, it told investors it had a multi-year plan in place to overhaul its operations, Walmart now has some cushion when it comes to achieving those goals.
Walmart can cut prices or offer free shipping and it won't hurt the earnings estimates, Cramer said, in part because management already set estimates so low in the first place.
With shares up 21% on the year, Cramer said he is hoping that Walmart's outperformance will start to spill over into the rest of the retail sector. Some stocks, like Action Alerts PLUS holding Target (TGT) - Get Report , or Macy's (M) - Get Report or Nordstrom (JWN) - Get Report , are already starting to come back.
The retail sector has been performing better, partly because of the recent expansion of credit, Cramer said. The expansion in May was shocking, Cramer commented, and investors should have paid more attention to it.
This is good for retail, Cramer said, as there's more spending in the system.
At the time of publication, Cramer's Action Alerts PLUS had a long position in TGT.