We recently compiled a list of the Jim Cramer’s Game Plan: 13 Stocks in Focus. In this article, we are going to take a look at where Macy’s, Inc. (NYSE:M) stands against the other stocks in Jim Cramer’s game plan.
Jim Cramer, the host of Mad Money, recently discussed the crucial events on Wall Street this week and emphasized the importance of watching upcoming earnings reports. He pointed out that the Thanksgiving period often brings a surge of optimism to the market. However, Cramer expressed concern that this enthusiasm is getting out of hand.
“Thanksgiving tends to unleash the animal spirits of the market in a very positive way. I’m no killjoy… but there’s getting to be a little too much speculation for me and if we don’t deal with it, if I don’t talk about it, it’s gonna become a problem.”
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Cramer also turned his attention to Bitcoin, commenting on the growing buzz around the cryptocurrency. He expressed his hope that Bitcoin would finally reach the $100,000 mark so the conversation could move on. According to Cramer, the surge in Bitcoin’s price is largely tied to speculation fueled by the President-elect’s idea of creating a strategic Bitcoin reserve. He noted that many people who had missed out on Bitcoin when it was trading lower are now justifying their purchases at these higher levels.
“As long as it’s legal, I’m all in but understand, I have nothing to offer on Bitcoin’s $100,000 price tag, nor does anybody else, by the way, except to say this: This is what happens when there are more buyers than sellers.”
Turning to broader market trends, Cramer acknowledged that stock trading tends to slow down during the rest of the holiday week. However, he highlighted that Wednesday would bring the latest personal consumption expenditures (PCE) report from the government. This report, a key inflation measure for the Federal Reserve, could give a clue as to whether the Fed will consider another rate cut before the year ends.
Cramer noted that the economy has been running hotter than the Fed would prefer, which has led to speculation that a rate cut in December might not be necessary. The situation is particularly challenging, he explained, because long-term interest rates, including mortgage rates, have been rising since the Fed began its rate cuts. Normally, these rates would decrease in such an environment, so if the PCE report shows a cooler inflation reading, it could fuel another rally. On the other hand, if the report is hot, Cramer suggested it could trigger a downturn in some of the more speculative stocks.
“If you have huge profits in the month of November, could you do me a favor? I would show a little thanks next week and take something off the table in your most risky positions.”
Our Methodology
For this article, we compiled a list of 13 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on November 22. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A customer in a store trying on fashionable apparel and accessories for purchase.
Macy’s, Inc. (NYSE:M)
Number of Hedge Fund Holders: 38
Cramer highlighted that Macy’s, Inc. (NYSE:M) stands to make a lot of money over the holiday season and commended the company’s CEO.
“Now we’ve seen a bunch of retailers’ reports not sweating numbers yet in many cases, their stocks still roared. Meanwhile, others like Target get clubbed like baby seals. It’s treacherous to start buying these now because many of these stocks have run mightily in the last few days… Next up, Tony Spring, the CEO of Macy’s knows that his chain makes an incredible amount of money in the next 30 days. This quarter is simply a prelude to Macy’s season. If he can tell a good story about the Bloomingdale’s-ization of the chain… then his stock will build on today’s lead. I mentioned that because Tony is from Bloomingdale’s and he did such a great job there and I’m pulling for this guy.”
Macy’s (NYSE:M) is an omnichannel retailer offering a variety of products, including apparel, accessories, cosmetics, home furnishings, and more, through its Macy’s, Bloomingdale’s, and bluemercury brands. In February, it appointed Tony Spring as Chairman and CEO, a leadership change aimed at navigating the company through challenging times. The company has been grappling with declining sales and market share loss.
In response to these challenges, Spring introduced “A Bold New Chapter,” a strategy designed to modernize the company and secure a more sustainable future. Under it, the company is rethinking its physical store strategy. It is in the process of closing underperforming locations in low-traffic areas while simultaneously opening new, smaller “go-forward” stores. These new stores are part of a test group known as the “First 50,” which aims to create a better shopping experience.
The company’s vision for the future includes a more appealing merchandise assortment, improved store layouts with less clutter, and a better flow of products. Additionally, Macy’s (NYSE:M) plans to increase staffing in these locations to improve customer service and experience. Additionally, in a recent interview with Yahoo Finance, Spring emphasized that the company’s three-year plan focuses on achieving sustainable, profitable growth.
Overall M ranks 8th on our list of the stocks featured in Jim Cramer’s game plan. While we acknowledge the potential of M as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than M but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
