On Friday, CNBC’s Jim Kramer offered a list of nine discounted retail stocks that he believes could be a great addition to investors’ portfolios.
“Today we’ve seen a lot of these retailers with discounts come together nicely, but it will take a long time like today for these stocks to come close to getting expensive again.
Kramer’s comments came after the Dow Jones Industrial Average rose 0.4% on Friday when the S&P 500 fell 0.27%. Nasdaq Composite is down 1.34%.
To come up with a list of retailers, Kramer began with a list of each retailer of the S&P 500, S&P Mid-Cap 400 and S&P Small Cap 600 before releasing each company with a market cap below $ 1 billion.
He then sold out the stock for more than 10 times the earnings and also booted Gamestop and Bed Bath and Beyond as their multiple earnings have no value and are expected to lose money this year.
Kramer then lowers the list further to meet the following criteria:
- No more than three EBITDA ratios are in debt
- There is no income forecast for this year which is 20% less than last year
- They did not miss the numbers when reporting their first quarter results
- No dividend yield below 1%
Here is a list of nine retail companies that fit this bill:
- Signet Jewelers
- American Eagle Outfitters
- Dick’s Sporting Goods
- Bathing and physical activity
- Good shopping
Disclosure: Kramers Charitable Trust owns shares in American Eagle Outfitters.
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