We recently published a list of 10 stocks Jim Cramer talks aboutIn this article, we will look at how Walmart Inc. (NYSE:WMT) compares to other stocks that Jim Cramer talks about.
On a recent episode of Mad Money, Jim Cramer suggested that we may be misreading retail. He argues that the debate over whether consumers are sick, healthy, frugal or stressed may be misguided. According to Cramer, consumer behavior doesn’t change dramatically overnight; people don’t suddenly go from sick to healthy in a quarter. Looking ahead to Friday’s Fed discussion in Jackson Hole, with market averages up 56 points and the S&P 500 up 42%, it’s clear that we need to rethink our views on the state of consumers.
“Maybe we’re looking at retail all wrong. Maybe this whole debate about whether the consumer is sick, healthy, frugal or stressed is just a big pile of crap. The consumer doesn’t change behavior overnight; they don’t get sick and then recover within a quarter. When we think about what the Fed will be discussing in Jackson Hole on Friday while the averages are up 56 points and the S&P 500 is up 42%, we need to rethink the big debate about the state of the consumer.”
Jim Cramer points out that understanding consumer behavior is crucial to predicting when the Fed might cut rates. He explains that the Fed needs to cut rates before the economic situation deteriorates to the point where urgent intervention is required. However, the Fed cannot act when the economy is doing well.
“This debate is central to the market’s need for rate cuts. First, we need to understand that the Fed needs to start cutting rates before the economy deteriorates to the point where it has to rush to fix things. But it can’t act when the economy is doing well. Aggregate retail sales data is inconclusive, so we often try to extrapolate from individual retailer data. Collectively, these retailers seem to suggest that the consumer is fickle and potentially overwhelmed.”
Jim Cramer argues that the current debate about consumer behavior may be misguided. He believes consumers are not as fickle as some claim. Instead, they shop at stores run by successful retail CEOs like Ron Vachris, Doug McMillon, Ernie Herman and Brian Cornell.
“Tonight, I argue that the consumer is not fickle at all. People go shopping, and they shop where great retail CEOs are making a difference, like Ron Vachris at Costco, Doug McMillon at Walmart, Ernie Herman at TJX and Brian Cornell at Target. Those are the places where people shop. The consumer is not thrifty or stingy; he just shops where he prefers to shop, and these great retailers attract him.”
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A manager stands in a hypermarket and points to items available for wholesale sale.
Walmart Inc. (NYSE:WMT)
Number of hedge fund investors: 95
Jim Cramer spoke about Walmart Inc. (NYSE:WMT) under Doug McMillon, noting that while McMillon often avoids detailed comments on quarterly performance, Walmart’s strategy of cutting prices on 7,200 items is attracting attention. Cramer emphasized that Walmart Inc. (NYSE:WMT) is now offering remarkably low prices, with some items discounted to 2020 or 2019 levels.
“Finally, let’s talk about Walmart under Doug McMillon. McMillon doesn’t like to talk about the details of the quarter, but one thing is clear: By cutting prices on 7,200 items, Walmart is making people notice. Shoppers are going to Walmart and finding incredibly low prices, some even back to 2020 or 2019 levels. Walmart, once a boring shopping experience, is now mind-blowing. Before you dismiss it, I urge you to take a look – don’t be a snob. You might be surprised at how great Walmart is.”
Walmart Inc. (NYSE:WMT) is a strong investment due to its massive global footprint and strategic strengths. As the world’s largest retailer with over 10,500 stores in 24 countries, Walmart Inc. (NYSE:WMT) leverages its scale to negotiate favorable contracts with suppliers, allowing it to offer low prices while maintaining healthy profit margins. Walmart Inc. (NYSE:WMT)’s extensive distribution network and efficient supply chain further enhance its ability to effectively serve a large customer base. In fiscal 2023, Walmart Inc. (NYSE:WMT) reported revenue of $611.3 billion, up 6.7% year over year.
This solid financial performance supports the company’s ability to invest in growth, pay dividends and buy back shares, making it attractive to investors. Walmart Inc.’s (NYSE:WMT) e-commerce sales rose 17% in fiscal 2023, thanks to improvements in its online platforms and services like Walmart+. Walmart Inc.’s (NYSE:WMT) business model has also proven resilient during economic downturns such as the COVID-19 pandemic, when strong sales of essential goods drove growth.
Walmart Inc.’s (NYSE:WMT) strategic moves in healthcare, financial services and new technologies are increasing the company’s long-term growth potential. In addition, the company’s commitment to sustainability and social responsibility, with a goal of zero emissions and zero waste by 2040, is increasing its brand’s appeal to socially conscious investors.
Total WMT 2nd place on our list of stocks Jim Cramer talks about. While we recognize WMT’s potential as an investment, our conviction lies in the belief that under-the-radar AI stocks offer more promising prospects for higher returns and do so in a shorter time frame. If you’re looking for an AI stock that’s more promising than WMT but trades at less than 5x earnings, read our report on the cheapest AI stock.
READ MORE: $30 trillion opportunity: The 15 best humanoid robot stocks to buy, according to Morgan Stanley And According to Jim Cramer, NVIDIA has “become a wasteland”.
Disclosure: None. This article was originally published on Insider Monkey.
