Is Big Lots The Next Discount King?

The Dow Jones Industrial average reversed a decline in early day trading and managed to extend its rally for am eighth consecutive day, gaining 37 points to close at 9,580 on Thursday. However, trading volumes remained light as vacation schedules reduced activity levels.

Here is a review of the performance of Jim Cramer’s stock picks from Wednesday’s Mad Money show.

Williams Sonoma (WSM: 36.96 0.00%)
The retail stock gained 5.0% today after Cramer’s recommendation on last night’s Mad Money show. Cramer believes that back to school sales are going strong and recommended Williams Sonoma along with Tiffany’s (TIF: 64.01 0.00%), Family Dollar Stores (FDO: 57.48 0.00%) and Ralph Lauren (RL: 171.49 0.00%).

Big Lots (LOTS: 0.00 N/A)
In part 3 of the weeklong series, Jim Cramer profiled Big Lots as a potential candidate to be the next “discount king”. The company has been able to beat Wall Street’s estimates and has increased its 2009 guidance. While same-store sales have been declining, Cramer believes that trends will change by the end of the year. With the stock trading at a discount to peer Costco (COST: 84.28 0.00%), Cramer believes the stock is cheap and recommends buying.

Cramer’s Lightning Round stock picks:

Caterpillar (CAT: 114.04 0.00%) dropped 0.4% – Cramer believes the stock will likely dip back down to $40, but is bullish over the long term.

Kirklands (KIRK: 16.80 0.00%) rose 6.6% – “They put up some good numbers and I think it goes higher.”

Oracle (ORCL: 28.73 0.00%) dropped 0.2% – This tech stock bucked the “Cramer effect” and fell despite a strong buy recommendation from Jim Cramer.

AT&T (T: 30.02 0.00%) fell 0.3% – Cramer feels the telecom stock is going from $25 to $30, but the markets seem to shrug off the recommendation.

Verizon Communications (VZ: 37.92 0.00%) dropped 1.3% – Cramer believes that Verizon is going from $30 to $35.

Cinemark Holdings (CNK: 20.07 0.00%) fell 0.1% – Cramer dislikes the cinema business due to their high debt loads.

CNH Global(CNH: 43.97 0.00%) gained 0.5% – Cramer was bearish and recommended selling the stock.