Cramer: Retail Isn't All Bad; Look at Walmart, Ulta, Gap Upgrades

 | Jul 14, 2017 | 8:10 AM EDT
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ulta

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wmt

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gps

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bby

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amzn

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tgt

Discerning? Are people beginning to discern among retailers? I postulated that there had been some discerning lately, that not all retail is created equal.

Today's upgrade of Ulta (ULTA) and Walmart (WMT) by Goldman Sachs tells me that it might be happening. Same with the big push by JP Morgan's Matthew Boss on Gap (GPS) today, making it his top specialty pick.

First, understand, the ETF-ization that I first wrote about in Get Rich Carefully three years ago, where I said that stocks in sectors would soon no longer be able to distinguish themselves no matter what they do, has now happened. It is almost impossible for a retailer to get any traction as its own entity. And if it does, like Best Buy (BBY) , then what seems to happen is you get some throw-away story out of Amazon (AMZN) that it's gunning for that one winner -- think the Amazon Geek Squad.

Of course, it's not just Amazon. The stay-at-home thesis seems to build steam. The discretionary spend on experiential grows as a headwind. The overseas food challengers, Aldi and Lidl, aren't going away. They are coming!

But I have been saying that if you have situations where individual companies are improving on their own selves -- in other words, creating their own better comparisons -- then I think you will begin to make money.

Walmart and Gap are two of those situations. Walmart is making bold moves and the numbers are improving; and, as Goldman states, the company is really the best positioned to keep up with the spend needed to compete with Amazon. Gap, as Boss says, is at a trough valuation and can rally from here.

Ulta? It's come down enough to re-explore, and as much as a big department store might discount cosmetics, I still think that Ulta is going to remain a juggernaut. It just won't be accorded any multiple expansion as it had for some time. The Goldman upgrade assumes similar thoughts.

I think that in the backdrop of Target's (TGT) better-than-expected numbers yesterday, these calls will keep the ball rolling. Now, I just wonder: will anyone start discerning among the oils?

That's probably too much to ask for.

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