Cramer: Investors Shifting to Big-Cap, Low-Multiple Stocks
Investors are shifting their focus to big-cap, lower-multiple stocks from those with high multiples, Cramer said during Tuesday’s “Stop Trading.” That’s one reason Walmart has once again become attractive.
Rather than owning stocks like Urban Outfitters , which trades at 17.4 times fiscal 2012 earnings, investors like Walmart and its much lower 12.8 fiscal 2012 multiple. This is part of a broad undercurrent that Cramer sees sweeping through the market right now.
“We’re seeing that even on a day like today where there’s a lot of Nasdaq that is not doing well,” the “Mad Money” host said. “And then you hit up certain Nasdaq stocks that are lower multiple, and they’re on fire.”
Another reason WMT seems to be on fire is its chart, which Cramer said shows a “multiyear technical breakout” in the works. While he prefers fundamental to technical analysis, he did say the move legitimate and worth noting.
In housing, one of Cramer’s favorite plays in Ethan Allen . The CEO told “Mad Money” in an interview that the rise of the stock market has translated into more business for the company, as investors pour their profits into home improvement. Cramer called ETH “dramatically improved” and said that the increased revenues from this new business should result in “an explosion in earnings.”
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