By Stockpickr Staff
Posted on June 16, 2009

Best Buy (BBY) earned $153 million, or 36 cents a share, in the first quarter, beating analyst expectations but dropping from the prior-year quarter's $179 million, or 43 cents a share. Revenue was up 12% to $10.1 billion, but same-store sales declined 6.2%. The company added 185 new stores over the past year.

In other earnins news, A-Power Energy's (APWR) profit fell to $1.5 million, or 4 cents per share, from $2.9 million in the year-ago quarter. FactSet Research (FDS) reported earnings of $38.5 million, or 79 cents per share, up from $32.5 million, or 65 cents per share.

General Motors (GMGMQ) will sell its Saab division by the end of the third quarter. The buying consortium is led by Swedish automaker Koenigsegg Automotive.

A viral infection in a bioreactor at its Boston manufacturing facility is forcing Genzyme (GENZ) to temporarily close the plant in order to sanitize it. The company foresees a July reopening for the plant.

With this in mind, we thought we'd take a look at what Jim Cramer's had to say lately about stocks in the news.

These stocks could be in the news for a number of reasons. Some require immediate attention; others may not. Regardless, it never hurts to hear what Cramer (or any professional investors) has to say about them. The key is to gather as much information as you can in order to make the most informed investment decisions you can.

In a recent post to his RealMoney blog, Cramer wrote:

"Is the Wal-Mart (WMT) downgrade by Goldman Sachs 'right?' How about the Target (TGT) upgrade that comes with it? Is it time to desert Wal-Mart for Target because things are better? Because people will now shop at the 'nicer' stores?

"Boy, this is a tough call. For Action Alerts PLUS, we decided to sell WMT because we believe, as Goldman Sachs does today, that the marketplace will walk away from Wal-Mart because of the "less bad" analysis that Home Depot (HD) gave you last week. I just don't know if the shoppers or the stock buyers will flock to Target, especially because Target is up 16% for the year vs. Wal-Mart at down 11%.

"If you recall, Home Depot issued upside guidance last week that was heavily skewed to costs but also a belief that things were getting "less bad." Had the company said "much better," then the desertion of Wal-Mart would have been a lay-up. No way would people stick with it if we know that things are cooking in this economy.

"But I am torn on this one. We found out what drove retail out of the doldrums in the late fall: the collapse of oil and gasoline and heating bills (the latter never gets talked about but was huge). We then found out that it was further driven by stock market gains and the concomitant wealth effect, another overlooked issue. We also, I believe, had a psychological lift from the change from an extremely unpopular president to a very popular president, still one more unheralded issue.

"I point these out as unheralded because if you just looked at the headlines about employment and housing, you would have to believe that the retail move didn't happen.
But it did.

"So what's the problem with the downgrade of Wal-Mart and the upgrade of Target? I continue to think that housing's bottomed already. The stock market keeps rallying, although it seems like a breather is in store.

"But gasoline was the biggest driver, and gasoline cannot go above $3 without some sense that the retail move will run out. This downgrade relies on a continued progression from 'less bad' to 'very good.' Of course, if it stops here, I think the consumer will continue to migrate away from Wal-Mart; more important, the stock market will migrate from Wal-Mart, although I suspect that options pressure will keep the stock at $50, as it is one of the most frequently pinned stocks in the firmament.

"Ultimately I believe the downgrade of Wal-Mart will be right. Why? One very important reason is the Goldman analyst herself, Adrianne Shapira, who has been an excellent judge of the macro environment -- the biggest component of any call about a stock where 100 million people shop each week -- and the micro, the actual look and feel of the stores. Shapira put a buy on this stock Oct. 17, 2007, as we were heading precipitously toward a recession and ultimately a garden-variety depression. Since that time the stock rallied 8.4% vs. the S&P 500 plummeting 38%. That's fabulous absolute performance. For the last 12 months that she has had it as a buy, the relative performance has remained better than the S&P, down 15% vs. the S&P 500 down 29%. That's pretty much a push vs. the Retail HOLDRs (RTH) ETF, the perceived bellwether for the group, which was down 14%.

"However, for the year, Shapira's been dead wrong about Wal-Mart vs. Target -- WMT is down 11% and TGT is up 17%. Shapira believes Target, which is at $40, could go to $51. That could happen because TGT has lagged the other names in the group: Kohl's (KSS) is up 28%, Macy's (M) is up 21%, JC Penney (JCP) has climbed 48% and Nordstrom (JWN) has rallied an astounding 56%. I think it's way too late to swap into those plays, although I like Home Depot, which is only up 5% for the year, and Lowe's (LOW), which is down 7% (I own HD for Action Alerts PLUS.)

"(Shapira notes that she believes that credit card defaults are going to peak in May and June, a big deal for Target and a very contrary call to others on this issue, and that gross margins may be improving because of tight discipline, a true change that I would like to see first.)

"Of course, it would have been great had she downgraded Wal-Mart at the beginning of the year and gone with the more aggressive plays like Target. I see that her Target upgrade is a reinstate buy, as the firm seemed to be restricted on the stock.

"I don't want to judge her too harshly on recent history because of the restriction and because her cautious approach saved you as much as the others made you, because while they are up a great deal, they started from an awful base. Consider that JCP started at $62 when Shapira went with Wal-Mart and is now at $28! Boy, it's hard to get back to even when you are down that far.
Here's my bottom line on the two: I think Wal-Mart's dead money. But I think Target won't get to her target price unless gasoline goes down. She's just too aggressive. I think all the others have to pull back, especially if oil keeps rallying.

"No matter, this stock debate of Wal-Mart vs. Target is at the crux of what is about to happen next. If we are going to slip back into a world where the economy fails, we will want to swap back into Wal-Mart. If things get better, as opposed to 'less bad,' then you go with Target. But right now, because of the 'less bad' designation, I would just go with Home Depot, or go with nothing. Right now, the group's too hard and sometimes that's all that you can say.

"Random musings: RBC capital raises Best Buy's (BBY) numbers. Fits with Shapira's thesis."

For more of what Cramer's had to say about stocks in the news, check out the Cramer's Take portfolio on Stockpickr.

(Editor's note: At the time of publication and/or original publication of his posts and shows, Cramer owned Home Depot and Goldman Sachs for his Action Alerts PLUS charitable trust.)