Home Depot, Other Retail Stocks Should Benefit From Lower Gasoline Prices

Updated to note Glen Senk, the former CEO of Urban Outfitters, is currently CEO of Front Row Partners.

NEW YORK (TheStreet) -- Retail stocks were the Tuesday focus on CNBC's "Fast Money Halftime" show. After looking at a variety of earnings reports, Pete Najarian, co-founder of optionmonster.com and trademonster.com, said he is taking a look at Home Depot (HD)  on the long side

He's already long Lowe's (LOW)  but is impressed by Home Depot's top- and bottom-line earnings beat and tempted by the stock's 2% pullback. He also likes Foot Locker (FL) ahead of its earnings later this week. 

Home Depot is "one of the best retailers overall," said Stephen Weiss, founder and managing partner of Short Hills Capital Partners LLC. However, his top pick continues to be Macy's (M) .  

Don't forget about athletic wear. Although shares of Under Armour (UA) have had a big move to the upside, there's still more room to go, said Mike Murphy, founder of Rosecliff Capital. 

Teen shoppers are doing well, but teen retailers are not, according to Glen Senk, former CEO of Urban Outfitters (URBN) and CEO of Front Row Partners. Urban shares approached two-year lows after disappointing third-quarter earnings. Senk notes that 90% of the company's revenue is from consumers 20 years and older, and that the company's ability to morph itself makes it a worthwhile bet among retailers who target teen consumers. He encourages all retailers "to innovate and be more creative, maybe let the pencil pushers take a backseat to the merchants."

Lower gasoline prices are likely helping teen shoppers as well as customers of DineEquity (DIN) , which owns the Applebee's and Ihop brands, said Josh Brown, CEO and co-founder of Ritholtz Wealth Management. 

Target (TGT) customers should also benefit from a stronger dollar and lower oil prices, Najarian said. Murphy said another beneficiary is Costco Wholesale (COST) .  

The strong U.S. dollar is also putting downside pressure on the Japanese yen, accelerating the Bank of Japan's attempt to weaken the currency. Brown says investors can stay long Japanese stocks, particularly the WisdomTree Japan Hedged Small Cap ETF (DXJS) .

The long Japan trade has been working well, Murphy said. But if investors have missed the move they should certainly wait for a pullback after the recent rally. 

One beneficiary of the lower yen is Toyota Motors (TM) . However, the positive boost is having a smaller impact on earnings because 70% of what the company sells is built in North America, according to Jim Lentz, the CEO of Toyota North America. He highlighted the company's new hydrogen fuel-cell car, which can drive 300 miles per tank and only costs $30 to $35 to fill. The vehicle will cost $57,500 before incentives and will be available in the U.S. in the fall of 2015.

Najarian said his top auto pick is Tesla Motors (TSLA)  but suggested owning the stock via options in order to limit downside risk. 

Every new car needs tires, Weiss said. He likes tire companies, which should benefit from a strong auto market and falling input prices. 

The conversation shifted to Apple (AAPL) and Alibaba (BABA)  and which one investors should own. "I like them both," Weiss said. Apple is his first pick but he acknowledged that Alibaba is likely to perform better headed into year's end. 

Apple will be the "must-have stock" for fund managers, Brown said. Shares only trade at 13 times next year's earnings and the stock has some catching up to do after it sat out much of the broader market's bull run over the past two years. 

Najarian owns both stocks, but said Alibaba has superior growth and more international potential. Murphy added that Apple has more cash and is a more familiar name for most investors, which may make it a more comfortable pick for some investors. 

For their final trades, Najarian is buying Deutsche Bank (DB) and Murphy is a buyer of Ford (F) . Brown said to buy DineEquity and Weiss is buying Hertz Global Holdings (HTZ) . 

-- Written by Bret Kenwell

Follow @BretKenwell

More from Jim Cramer

Regions Financial, Edwards Lifesciences: 'Mad Money' Lightning Round

Regions Financial, Edwards Lifesciences: 'Mad Money' Lightning Round

First Horizon National: Cramer's Top Takeaways

First Horizon National: Cramer's Top Takeaways

Waste Management: Cramer's Top Takeaways

Waste Management: Cramer's Top Takeaways

Jim Cramer: Will Apple or Amazon Become the World's First Trillion Dollar Stock?

Jim Cramer: Will Apple or Amazon Become the World's First Trillion Dollar Stock?

Not Thankful for Fridays: Cramer's 'Mad Money' Recap (Friday 4/20/18)

Not Thankful for Fridays: Cramer's 'Mad Money' Recap (Friday 4/20/18)