Retail stocks look more attractive following a subdued February inflation data.
The Bureau of Labour Statistics released a report last week that the Consumer Price Index was 0.2% for the month, and 2.8% for the entire year.
Comparatively, economists were at 0.3% and 2,9% respectively.
A decrease in inflation is generally a positive factor for retail stocks, as it increases consumer spending.
Plus, a lower CPI opens the door to rate cuts which will increase the disposable income of consumers.
Jim Cramer, the famous investor, recommends that you buy Gap and Ralph Lauren at their current levels.
Why is Cramer bullish about Gap stock?
Jim Cramer believes Gap shares are worth buying, “as long you don’t believe the entire economy is going to fall off a precipice.”
Richard Dickson is Gap’s new Chief Executive Officer. Dickson has a great deal of confidence in his leadership. All four brands of the company gained market share during the last reported quarter.
The global clothing and accessories retailer also has a strong position to navigate the Trump Tariffs.
Gap sources less that 1.0% of its product from Canada and Mexico, and about 10% from China. This suggests it will be able to remain resilient in the new tariff environment.
The Mad Money host believes that while the stock may be choppy in the near term, investing at the current level will benefit investors over the long-term.
Cramer is also bullish on GAP because it pays an attractive dividend yield of 3.28% as of the date of this article.
Why is Cramer bullish about Ralph Lauren stock
Jim Cramer, on Mad Money, last week, said that Ralph Lauren shares have fallen by more than 20% since the middle of February. This is a great opportunity for long-term investment.
The famous investor is not convinced that the US is heading for a severe economic recession. Ralph Lauren stock, he said, looks “darned expensive at current levels.”
He acknowledged that Trump’s tariffs may impact Ralph Lauren, and that a possible economic slowdown is still possible.
He noted that the company serves primarily high-income households which tend to be resilient during recessions.
Jim Cramer believes that RL shares are better positioned for a comeback than their peers, as the brand has maintained cultural relevance.
Ralph Lauren, like GAP, is a dividend stock with a current yield of 1.50%. This makes it even more attractive to those looking for supplemental passive income.
This post Gap and Ralph Lauren : 2 retail stocks you should buy after February inflation data could be modified as new information unfolds
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