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CNBC’s Jim Cramer said on Monday that he believed two recent business dissolutions created four shares worth buying.
The first spin-off involves XPO Logistics and the new separate entity, GXO Logistics. The deal was reached on August 2. XPO Logistics operates a freight forwarding and truck brokerage business, while GXO Logistics is a warehousing and logistics business focused on last mile delivery.
“Honestly, I love them both,” said the host of “Mad Money”, calling XPO a “fabulous piece of e-commerce.” While the company’s shares aren’t as cheap as they once were, Cramer said much of it has been standing water since May. “I think it’s more upside down,” he said.
XPO shares closed Monday’s session up about 2% to $ 86.62, bringing its year-to-date losses to 27.3%.
GXO, on the other hand, “has always been the jewel in the XPO crown,” Cramer said. “GXO has real scarcity value given that there are really very few pure play contract logistics companies in the US. Even after the incredible movement of the last few weeks… I would be a buyer,” a- he added.
The other split highlighted by Cramer involved an entity formerly known as L Brands. It’s now become two separate companies: lingerie brand Victoria’s Secret and Bath & Body Works, which makes lotions and hand sanitizers.
While Cramer has said he is “hesitant” to give Victoria’s Secret the benefit of the doubt, he noted that the company is making serious efforts to refresh its image and that top retail analyst Matt Boss of JPMorgan , is optimistic about its prospects. Boss has a price target of $ 100 on Victoria Secret shares, which closed at around $ 66 apiece on Monday.
“I think the action reflects all of the issues but none of the potential positives, which makes it so appealing,” Cramer said, adding that he was “ready to bless the new Victoria’s Secret for the speculation on the turnaround” .
Bath & Body Works, meanwhile, is a solid long-term investment, according to Cramer. However, he warned that the action could face short-term challenges as the company finds itself in a period of difficult year-to-year comparisons after having excelled during the Covid pandemic.
“This business has managed to thrive even when it was attached to the hip at ailing Victoria’s Secret, so I bet they can do a lot better on their own. At 15 times next year’s profit estimates. , I call it a good deal, ”Cramer said.
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