Following the announcement from the banking giant Barclays regarding its decision to downgrade the retail sector to a ‘neutral’ status due to limited gross margin and growth potential in the stock market, Jim Cramer had a brief reaction.
Indeed, the lively host of ‘Mad Money’ and former hedge fund manager seemed to agree with Barclays’ evaluation. In a post on X, he simply pointed out that there are only three retailers that are worth investing in during the summer of 2024: Amazon (NASDAQ: AMZN), Walmart (NYSE: WMT), and Costco (NASDAQ: COST)
Amazon (NASDAQ: AMZN)
Given Amazon’s widespread presence in the modern world and its significant role in the current artificial intelligence (AI) surge through the dominance of Amazon Web Services (AWS) in the cloud provider market, it is not surprising that Jim Cramer views the company as one of the three retailers worth holding.
Furthermore, with AMZN recently experiencing some setbacks in the stock market, resulting in a 17.08% decline in 30 days due to the widespread downturn in early August and following the latest earnings report, August 7 could present a favorable buying opportunity for investors, provided Cramer’s bullish outlook is accurate.
Walmart (NYSE: WMT)
Walmart is another company that Jim Cramer has consistently shown optimism towards. In July, he suggested that WMT stock might soon enter the ‘trillion dollar club,’ referring to companies with a market cap exceeding $1 trillion, and could be the first conventional retailer to transition into an e-commerce giant.
Cramer’s positive view on Walmart shares seems justified given its status as a secure investment due to its stable and non-cyclical business model as a discount retailer. The company has been performing strongly in a bullish market, reaching new all-time highs on multiple occasions in recent months and showing a 28.13% increase year-to-date (YTD) to its current price of $68.04.
Costco (NASDAQ: COST)
Nearly a year after Jim Cramer declared Costco as ‘one of the greatest retailers in history,’ the company has indeed lived up to the praise in the stock market. Over the past 12 months, COST shares have surged by 48.30% to their current price of $824.75.
In the current year, this retail giant has shown remarkable performance, with a YTD increase of over 25% and quick recovery following the recent market downturn.
From a business perspective, Cramer has specifically lauded Costco for maintaining fair pricing amidst economic instability. He has even associated the decision to raise membership fees with easing inflation, viewing it as a positive development for investors.
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