What's the best retail play for this holiday season? All the expected gadgets are flying off the shelves: smart phones, e-readers, netbooks and flat panel TVs... but the most elusive subject is identifying the brick-and-mortar retailer that stands to be the strongest performer this holiday season.
There are clues all over the place, says Cramer. Nokia, the world's biggest cellphone company, said that handsets will grow by 10% and that smart-phones will reign supreme, so these products will be integral to the equation. But we also know that Apple products like the iPhone and iMac will be hot items, so a retailer that is also an Apple reseller is also an important component. Flat screen TVs are also a big chunk of the pie, so this retailer also has to provide these items as well, says Cramer.
With these facts in mind, the retailer set to be the most successful this holiday season is Best Buy, which Cramer expects to deliver a big upside surprise when it reports on December 15th. Also taking into account that Best Buy experienced great black Friday traffic, inventories are leaner than they were last year and that the store was the retailer of choice for most consumers looking for a flat screen TV.
With the company less than a point off of its 52-week high and trading at 13.6 times 2011 earnings with a 12.4% growth rate, Cramer doesn't think the stock is expensive. In fact, he points out, Best Buy is cheaper than just about every retailer out there, including Staples, Target , Kohl's and JC Penney. The name has been depressed because the market doesn't believe that consumers will open their wallets this year, which Cramer thinks is plain malarkey.
So what's Cramer's bottom line? This Christmas will focus on gadget buying and Best Buy is the place to shop. Cramer thinks this company is a buy ahead of its quarterly report, as he foresees this quarter returning the company to its "pre-recession glory."
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