Jim Cramer insists that investors should not go all in on one side – the economy is going to turn around and go gangbusters – or the other – it’s going squarely into the tank.
He told the Action Alerts PLUS club members during their August conference call that they need stocks that will do well in either scenario.
And here’s a few more examples of companies that will do well in a buoyant economy:
[What's] Brooks Brothers going to do with all that inventory? I'll tell you what they’re going to do. They're going to sell for cash to TJX. (TJX) - Get Report I think TJX is a monster stock here, right now supported by home goods. … TJX is ideal. I spoke to Matt Boss the other day. Matt is the excellent retail analyst at J.P. Morgan. I was depressed that he said he liked Burlington. … (BURL) - Get Report But when I spoke with him, he was, “come on, I like Ross, (ROST) - Get Report I like TJX.” And I told him: We really love TJX. And he said, of course, TJX, as we know, is going to get the bulk of the best buyers in the world. Buy TJX.
Retail stocks aren't just the thing to own in a booming economy. Here's how Cramer uses retail earnings as a telltale sign of what to expect from the economy.
We wish we had bought more Waste Management (WM) - Get Report when that stock was low 105, 106. … Jim Fish, the CEO, has been on “Mad Money” so many times. It's so fantastic. Its best business is the cleanup that comes from industrial expansion or, get this, new housing sites. And with rates low, the latter are growing like mad. And if this disease gets whipped, I think all the money that's being pumped into the economy could take this stock to or through historic highs.
But get this: Waste Management … stock is 15 bucks from its all-time high. I think that on any sort of word that the pandemic might be over, it goes past that. Again, blink of an eye because this company is levered to industrial and housing growth.
Finally, let me give you an oddball and I know it's an oddball because I've gotten a lot of questions about it. [It’s AbbVie, (ABBV) - Get Report the] great company with Humira, which is that amazing rheumatoid arthritis drug. And you know that they bought Allergan and a lot of people feel they paid too much. Nonsense. See, Allergan is an amalgam of drugs. But the most important one is Botox. Now, I take Botox [for migraines. … Botox] is precisely the kind of thing you can't get during the pandemic. There's not a lot of dermatologists [doing elective surgery]. And because they're not doing it, people feel that Allergan was a bad buy for AbbVie.
I think AbbVie, which yields 5%, goes well through 100. It's right now at 95. Next stop 115, 120. I mean, the power of Botox is incredible. And by the way, they have a pill [Ubrelvy] that gets rid of migraines in an hour. [There's] never been anything like it. … And when I spoke with the CEO of AbbVie, he totally agrees with me. AbbVie has [the reach] that Allergan didn't have. Botox sales will explode. Ubrelvy sales will explode. Thirty million migraines sufferers where it is now. [AbbVie] is a buy right here.