Jim Cramer fills his blog on RealMoney every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:
- How sporting goods are leveling the playing field
- How three stocks say interest rates are going up
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Cramer: Sporting-Goods Stocks Are Starting to Level the Playing Field
Posted on Aug. 19 at 1:48 p.m. EDT
One thing we were sure wrong about: sporting goods. First it was Dick's (DKS - Get Report) , which told us that things were alive and well post-Sports Authority's demise. Then we got the numbers from Foot Locker (FL - Get Report) on Friday, and it is now back to where it was after subpar numbers last quarter. (Foot Locker is part of TheStreet's Trifecta Stocks portfolio.)
I think we can all agree about two things: One is that we drastically underestimated the damage that the closing of 400 stores could do to this industry.
Second, perhaps there were never really any problems at all at Nike (NKE - Get Report) and Under Armour (UA - Get Report) , and they can be bought because they were totally caught up in this web, too. (Under Armour is part of TheStreet's Growth Seeker portfolio.)
Looks like the read-through is finally working out. Is it too late? Not for Nike, for certain. Under Armour's more expensive, but it has spent a lot of time in the wilderness. Let's throw VF Corp. (VFC - Get Report) in the mix because it has enough sporting-goods apparel that it might work. Same with Columbia Sportswear (COLM - Get Report) , which had a good quarter despite several bankruptcies in the space.
The group is underowned and underestimated. These stocks are all well behind the market.
We now have all the missing pieces of the puzzle and they spell "UPGRADE," as in every one of these stocks is probably back to being re-rated to where they were before the Sports Authority debacle.
Cramer: Junk the 'Mall Is Dead' Thesis
Posted on Aug. 19 at 9:26 a.m. EDT
So what happened to the mall, really? If you look at this quarterly crop of retail earnings, you are kind of stuck thinking that the consumer's going to the mall -- she's just going to fewer, more special stores in the mall that she thinks are intriguing or value-oriented.
Just go through what we heard from some mall-based retailers this quarter. Two entirely mall-based companies, L Brands (LB - Get Report) and Urban Outfitters (URBN - Get Report) , had among the strongest performances of any of the companies in the sector. Urban was across the board, but the really intensely mall-based Anthropologie was a total stand-out. L Brands saw some double-digit numbers out of Pink, which has become a stalwart in the mall. Bath & Body Works put up its usual strong numbers because, alas, you can't smell through Amazon (AMZN - Get Report) ... yet.
Ralph Lauren (RL - Get Report) saw a turn based on the company's ability to more quickly execute on what people want -- the speed factor -- which is what L Brands focused on so well in terms of making its improvements, too.
With this quarter, we saw a return to sanity in sporting goods. Foot Locker (FL - Get Report) had been reporting punk numbers, but if the mall is dead, how do you explain the astounding 4.7% increase it just posted with a nice 40 basis point improvement ? Yes, it is true we are now dealing with the closing of Sports Authority. But 4.7%? That's hardly dead, last I looked.
Children's Place (PLCE - Get Report) had a monster quarter and it's a mall-based operator. Jane Elfers doesn't get a lot of credit for what she has done, but it's been pretty reliably consistent and produced a terrific stock performance.
Who hasn't done well? We know that Macy's (M - Get Report) hasn't and it's been a heavy anchor. (Look for Dave & Buster's (PLAY - Get Report) to be taking advantage of the departure of Macy's from a bunch of malls, according to FillorKill.)
We know Gap (GPS - Get Report) hasn't, although it did catch an upgrade today. Tiffany's (TIF - Get Report) been a big loser. Penney's (JCP - Get Report) been hit or miss, but now trending toward hit. GameStop (GME - Get Report) has been nothing to write home about. Express (EXPR - Get Report) , Chico's (CHS - Get Report) , Skechers (SKX - Get Report) , all "eh". And who knows how many malls are still being hurt by the hundreds of Sears (SHLD) that are still trying to hold on.
My conclusion? I think we have to junk the "mall is dead" thesis and come back to differentiation. The mall-based Pink can't be putting up double digit numbers if the mall is dead. That doesn't make sense. Urban makes no sense either.
In the meantime, we do know that this was the quarter when Target (TGT - Get Report) has become a source of traffic for other companies and Amazon. You put up a minus comp, it means you are losing business to everyone from Walmart (WMT - Get Report) to Amazon to the specialty stores that hadn't been that strong of late.
Oh, and one more thing: don't blame Apple (AAPL - Get Report) for your weakness. I don't care how bad Apple has caused you to mis-plan, most people do not go to Target to get Apple merchandise. That one really stuck in the craw.
Cramer: 3 Stocks Say Interest Rates Are Going Higher
Posted on Aug. 17 at 8:09 a.m. EDT
When you get asked over and over again what's wrong with Johnson & Johnson (JNJ - Get Report) , you do some digging. That's been the strongest stock in the pharma group and it has the best fundamentals, so you don't expect it to be rolling over.
Then, when you get asked about if something's awry at Action Alerts PLUS charity portfolio holding American Electric Power (AEP - Get Report) , because it's been very weak, and then you get the same kind of fear emanating from those who own Federal Realty (FRT - Get Report) , you realize that it isn't about JNJ, AEP or FRT.
It's about rates.
These stocks are all saying rates are going higher.
Yes, on any day we could easily find something "wrong" about each stock. Dividend Stock Advisor portfolio name Southern (SO - Get Report) filed a gigantic slug of stock to pay for a recent acquisition, so that could pull down the group. JNJ's compadres, both Eli Lilly (LLY - Get Report) and Bristol-Myers (BMY - Get Report) have had recent and notable drug failures that remind you of the frailty of the industry.
Some in Federal could be worried about a pullback in the entire REIT group led by Macy's (M - Get Report) , the recognition, as outgoing CEO Terry Lundgren said on CNBC, that there's way too much retail capacity.
But the fact is that all of these stock groups have struggled while Citigroup (C - Get Report) advances, and Citi is the poster boy for stocks that people think need higher rates -- even as that's not the case at all, it's Bank of America (BAC - Get Report) .
Now, we have had periodic rate scares, endlessly based on someone from the Fed saying something tough, or the Fed minutes -- speak of the devil -- giving you some hawkish commentary.
The main thing to keep in mind, though, is that these pullbacks start exactly with the weakness in these kinds of stocks and continue for several days before the scare is either put to bed by Janet Yellen, or we get such weak data that it can't hold up to close scrutiny.
I doubt this time it will be different. But be aware that JNJ, AEP and FRT don't roll over idly. They roll over for big reasons: namely a belief by some that an accelerated rate hike situation could be upon us.