After Wal-Mart dropped a thermonuclear bomb last week on Wall Street, Jim Cramer has been watching the stock for signs of stabilization. Have things finally started to calm down? Well, not exactly.
"I still see plenty of reverberations. Many traders believe Wal-Mart will cut food margins to ribbons, hurting competitors like Kroger and stalling the Albertson's IPO that I said was too expensive anyway," the "Mad Money" host said.
And despite the reverberations that Cramer has felt, some of the actions that investors have taken recently seem wrong to him. For instance, there has been concern that apparel prices could go down. That was why retailers were hit so hard last week.
Cramer's not buying it.
The selling in stocks like Target was strange to the "Mad Money" host. Target has $8 billion in private label, in-house apparel brands that people like. So, why the heck would someone buy a brand that Wal-Mart makes instead?
More important, Target has a price match policy to match prices of competitors, including Wal-Mart. But that hasn't seemed to matter to shoppers who are a bit higher on the economic ladder and aren't as sensitive to prices.
"In other words, people aspire NOT to buy clothes at Wal-Mart; the numbers say they prefer Target," Cramer said. (Tweet this)
This is why Cramer recommended both Target and Kroger as a buy from the Wal-Mart fallout.