Jim Cramer, portfolio manager of the Action Alerts PLUS charitable trust, discusses the decision behind increasing their position in Target (TGT) this week. Cramer says, ‘where you see weakness in Walmart (WMT), you see strength in Target and this has become a zero sum economy. When companies are doing poorly it’s not because the consumer isn’t spending, it’s just that the consumer is spending at another place…[Brian] Cornell has figured it out.’ Cramer goes on to say about the company CEO, ‘Cornell is doing something that is so long term brilliant, he’s saying, listen if we win the category, baby, we will win a lot of other things including health, wellness, apparel, and it’s all coming together quickly.’ Cramer further explains, ‘when you decide to isolate some categories and win people over from Walmart, they’re not going to go back.’ Cramer outlines two reasons why Target shouldn’t be sold here. First, he points to the fact that the pharmacy portion of the business, which was not doing well, is gone. Cramer says, ‘CVS has taken over so that was a really great move, you don’t have to worry about pharmacy.’ The second thing Cramer points out is that this doesn’t include the back-to-school season. He says, ‘Back-to-school is Target’s payday other than Christmas. So you have two big things going in Target’s favor now…so do not sell it.’ Cramer concludes by saying, ‘Target has been a key name for us and it’s going to stay that way.’
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