Cramer explains that declining gasoline prices have not affected the big broad-line retailers as much as people had expected, but the dollar stores are magnets for the additional pocket change.
Therefore, he suggests a greater position in Dollar General because he thinks it could have the biggest upside surprise. When looking for the winners from lower gasoline prices, Cramer says to look at the companies he thinks are the pricey alternatives, specifically Ross Stores (ROST) , TJX Companies (TJX) , Dollar Tree (DLTR) , and Dollar General.
Cramer says Dollar General has the best growth characteristics out of those four, so he thinks that's the one in which people should invest.
TheStreet Ratings team also rates Dollar General as a "buy" with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate DOLLAR GENERAL CORP (DG) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year, growth in earnings per share, notable return on equity and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
- You can view the full analysis from the report here: DG Ratings Report