NEW YORK (TheStreet) -- The retail sector has been getting crushed in recent trading weeks. TheStreet's Jim Cramer and Stephanie Link, co-managers of the Action Alerts PLUS portfolio, looked at the sector and believe it can only take so much selling before it begins to look interesting to investors again.
To that end, Link suggested investors look at retailer stocks that are of the highest quality including Costco Wholesale (COST), Macy's (M), TJX Companies (TJX) and Nike (NKE). All but COST are AAP holdings.
She said these companies are not only quality names but are part of a long-term secular trend. TJX benefits from value-conscious and frugal customers while Nike has the health and wellness trend working in its favor.
Cramer added that TJX is a "winner, not a loser," and its recent big selloff could be a sign of an impending reversal. Nike is seeing solid growth out of China.
Starbucks (SBUX) reports earnings on Thursday after the close and has struggled in recent trading, down roughly 10% from its highs. Cramer suggested that if the stock reports weak results and doesn't sell off as a result, it's likely "game on" for many retail stocks.
-- Written by Bret Kenwell in Petoskey, Mich.