Adding to TJX
| Symbol | Action | # Shares Traded | Recent Price | % of Portfolio* | Shares Owned* |
|---|---|---|---|---|---|
BUY | 175 | $43.84 | 3.19% | 1900 |
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After you receive this Alert, we will be buying 175 shares of TJX Companies (TJX) at roughly $43.84. Following the trade, TJX will represent 3.19% of the portfolio.
Shares of TJX Companies have been beaten up week to date, similar to other names in the retail space. The weak action in price, which could be related to cautious commentary about the economic reopening, comes despite the company bringing back online its trio of online business (tjmaxx.com, marshalls.com, and sierra.com) at a limited capacity. The e-commerce stores represent an immaterial percentage of sales (the treasure hunt experience is not the same when you buy online), but having them back up and running is a positive sign that the bricks-and-mortar locations are reopening where they can. For what it is worth, tjmaxx.com reached Wednesday's capacity levels at the time this Alert was written.
Thinking about the market more broadly, we remain fans of the stocks that either benefit from the new "Covid-19 economy" and are traditionally defensive in in nature, but we still have to maintain our other side of the barbell that will benefit from the economic reopening. TJX is on that list, and Disney (DIS) and Starbucks (SBUX) are on it too. Recent exits like Citigroup (C) , Honeywell (HON) , and General Electric (GE) did not make the cut because they are more economically sensitive and the latter two are tied to an industry (aerospace) that could remain challenged for multiple quarters to come and lag the broader economic recovery-whatever shape that may be.
TJX is one of the few reopening plays we are willing to be patient, long-term accumulators in because off-price retailers typically come out of recessions in stronger position than where they were before. As challenged retailers struggle to sell their brand names, they are forced to mark down and liquidate excess inventory, allowing off-price retailers such as TJX Companies to opportunistically buy high-quality brands at fire-sale prices. And with a consumer that will likely be cost-conscious coming out of the shelter-in-places orders, we think TJX is in a great position to capture market share.
Action Alerts PLUS, which Cramer manages as a charitable trust, is long TJX, DIS and SBUX.