On Tuesday’s Mad Money program, Jim Cramer discussed four stocks that have fallen so far that they might be worth picking up. While the former hedge fund manager and CNBC regular was not endorsing any of these names as outright buys, he recommended doing further homework on the stocks as possible speculative plays.
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Lately Cramer has reiterated that he doesn’t like retail, because the sector is “too hard, ” but the former Mad Money favorites, Whole Foods and Panera Bread, have fallen so far they can no longer be ignored. Whole Foods has been walloped by competition in the organic and healthy food space, as ordinary supermarket chains like Kroger are expanding their offerings in this area. In a sense, Whole Foods has been a victim of its own success in inspiring competing stores and the burgeoning healthy food offerings mainstream supermarkets. Cramer doesn’t know if Whole Foods will be able to turn itself around any time soon, and it might need a kick from an activist investor.
Coach might have reported dismal same store sales in North America, but it is still all the rage in China and has successfully expanded its footprint into menswear. It also has a bountiful dividend, which isn’t typical for retail.
Panera Bread’s CFO resigned suddenly, and Cramer usually takes such unannounced departures as a negative sign. However, the stock rose rather than declined after this announcement, and Cramer thinks the management shuffle might signal a ray of hope for Panera. The generous stock buyback is a signal of management’s confidence in the company’s future.
Target may have been sufficiently punished for its severe security breach, and the reason to buy it is that the bad news is already baked into the stock. However, with Cramer negative generally on retail, he says he isn’t pounding the table on Target.