Jim Cramer Presents 'WATCH', His Top 5 Retailers On The Scale

Acronyms sometimes make life a little easier.

And it makes it easier to track key industry values ​​for Jim Cramer of CNBC, who chaired the FANG group and who on Thursday launched a new, simple name for retailers across the globe – "WATCH".

The scale is the ability of a company to expand its operations and sales while maintaining its costs. As Cramer has said: it's "a company big enough and powerful enough to control its own destiny".

"A company that is evolving is a company that survives and thrives even in the most challenging environments," said the animator of "Mad Money." "As an investor, you need to know which companies can evolve, because they are the ones who win, like Amazon, Microsoft, WATCH."

Microsoft, the IT giant that competes with Amazon in the cloud sector with its Azure business, is not listed in the WATCH list because it is not a retailer. Amazon, the internet giant who disrupted shopping, did the same with Walmart, Target, Costco and Home Depot.

What they all have in common is innovation, said Cramer.

"One of the biggest benefits of scaling is that it allows you to control your suppliers, maintain your gross margins and make your stock more enjoyable." ", did he declare. "That's the main reason I created a new acronym for the very few retailers that have enough scale for [have] control their costs and therefore their destiny ".

Cramer said Walmart big box retailer was about to fall into the same fate as Sears. The company lagged behind in this important and growing digital space, the stores were not attractive and their employees were paid too little, he said.

All this has changed. Their web business is booming and integrating with Jet.com. Employees are better paid, which has kept staff longer and shops are cleaner, Cramer added.

"Best of all, Walmart can negotiate prices with any supplier of its choice because they can not afford not to sell on the Walmart channel," he said. "It's really bad for their supply chain, but … is it still great for their shareholders."

Amazon was able to cross the $ 1 trillion market capitalization line again on Thursday and Cramer credits this growth to the company's ability to evolve. The technology conglomerate is using this scale to dominate retail and cloud computing with the growing Amazon Web Services.

"They use this scale to get better prices from their suppliers, which they can then pbad on to their customers, which hurts the competition," he said. "About nothing, that's why we have an antitrust law because when you're big enough, no one can compete with you."

Cramer congratulated CEO Brian Cornell and his vision for reinventing Target. The combination of its Shipt delivery system, store design and affordable prices, said the organizer, allows the company to win the metropolitan areas.

He acknowledged that one could say that Target, which serves about 30 million customers a week, is too small to be on the WATCH list.

"But given the speed at which Target is growing, I think it's only a matter of time for you to not feel like that," Cramer said. "Do not underestimate their e-commerce business, which is gaining momentum right now."

In his buying club, Costco has 83 million employee members, which translates into an excellent deal, said Cramer.

"I know I get the lowest price on everything I buy there," he said. "These people are magicians."

Cramer, who initially hesitated to add The Home Depot to the group, said the home improvement retailer was selling its goods quickly.

It's "a dream come true for suppliers, allowing them to get great deals," he said.

Disclosure: The Cramer Charitable Trust owns shares in Amazon.com, Microsoft and Home Depot.