On Friday, CNBC’s Jim Cramer offered a list of nine discounted retail stocks that he says could be great additions to investors’ portfolios.
“Today we’ve seen a lot of these discount retailers rally, but it’s still going to be a lot of days like today before these stocks come back expensive again. So I’d give a look at one of them”, the host of “Mad Money”. noted.
Cramer’s comments come after the Dow Jones Industrial Average rose 0.4% on Friday while the S&P 500 fell 0.27%. The Nasdaq Composite fell 1.34%.
To compile the list of retail stocks, Cramer started with a list of all retailers in the S&P 500, S&P Mid-Cap 400 and S&P Small Cap 600 before eliminating all companies with a market cap of less than 1. billion dollars.
Then he took out the names with stocks selling for more than 10x earnings, and also kicked off GameStop and Bed Bath & Beyond as they weren’t priced against multiple earnings and should lose money this year.
Cramer then further narrowed down the list of companies that meet the following criteria:
- Does not have a debt to EBITDA ratio greater than three
- Doesn’t forecast earnings this year down more than 20% from last year
- Didn’t miss the numbers when releasing its first-quarter results
- Does not have a dividend yield of less than 1%
Here is the list of nine retail companies that fit the bill:
- Bookmark Jewelers
- American Eagle Outfitters
- Dick Sporting Goods
- Williams Sonoma
- Bath and body care
- best buy
Disclosure: Cramer’s Charitable Trust owns stock in American Eagle Outfitters.
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