When retailers reported weaker-than-expected December sales figures on Thursday, the bears blamed it on a weak consumer and retail stocks sold off.
Unlike the bears, Cramer doesn't think the data signals the beginning of a big rollover. He does, however, think the pullback provides an opportunity to buy retail names at discount. This group, he said, always does better when employment improves and that could happen later this year. Yet, he expects analysts will nonetheless downgrade retail stocks based off of the December sales numbers.
"What these analysts don't seem to realize is the huge amount of business that retailers do after the holidays, especially in a year where Christmas was simply annihilated by the huge snowstorms that blanketed much of the country," Cramer said. "You may dream of a White Christmas, but these retailers don't, especially with every gift card they sell, a now established way to give gifts that are almost always redeemed right after Christmas."
Of course with the storm, people weren't exactly flocking to the stores.
With improved employment numbers and strong auto sales, Cramer doesn't think the consumer is weak at all. If people weren't shopping in the stores, they were probably buying online. People snowed in after Christmas could still do their shopping from home, only via the Internet. That's why he recommends Amazon.com —one of his F.A.D.S. C.A.N., an acronym for his fave momentum names with high growth.
Cramer thinks AMZN is poised for growth, as it continues to take share from traditional brick-and-motor stores by offering an array of products. Its Kindle electronic reading device has created the market for e-books and on the cloud computing front, its Web-based services are leading the way. He also noted that the Seattle-based company has 26 percent long-term growth rate, a loyal customer base, a low-cost inventory sourcing system and international exposure, as well.
Unlike others in the retail space, Amazon didn't take much of a hit on Thursday. So Cramer recommends using deep-in-the-money calls to cut off your downside while capturing more upside. The Apr. 170 calls for $23 allow you to create the stock at $193, which is around where it closed on Thursday.
If Cramer is right about people shopping online, you'll find about about it on the quarter, which will be announced before the options expire and if he's wrong, you will have your downside cut of below $170.
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