Jim Cramer: Apple Is ‘Cheaper Than Any Stock in the Dow’
Jim Cramer, a former hedge fund manager and host of CNBC’s ”Mad Money,” addressed the chatter that “something is wrong at Apple (NASDAQ:AAPL)” during a guest commentator appearance on the network on Monday. He said Apple currently doesn’t have Google’s (NASDAQ:GOOG) momentum and argued that “it’s just not an expensive stock.”
Cramer observed that “the fear here is so palpable” over Apple. He cited the recent downgrade Apple stock received from Standpoint Research. In a note to investors obtained by StreetInsider, Standpoint Research analyst Ronnie Moas downgraded Apple from a Hold rating to a Sell rating based on concerns about how the California-based company’s overseas suppliers treat their employees. Wells Fargo analyst Maynard Um also recently downgraded Apple from an Outperform rating to a Market Perform rating based on gross margin pressure concerns.
“Tim Cook is going to show people, ‘Stop doubting us,’” Cramer said on CNBC. “I think that the new products are fabulous.” He expects a new iteration of the iPhone to be released in a few months.
Several other industry watchers have also predicted that Apple will release a wearable tech product in 2014. Cantor Fitzgerald analyst Brian White reiterated in a recent note to investors that Apple will unveil its long-rumored iWatch this year, as well as up to three iPhone screen sizes.
Cramer noted that the Apple naysayers were also wrong about Samsung (SSNLF.PK). “Where’s Samsung?” he asked. “Remember Samsung was supposed to be the ‘Apple-killer’? They were killing Apple for a while, but you don’t hear much about that lately.”
According to Cramer, iPhone carrier Sprint (NYSE:S) will also help keep the company “front and center”: “I still think Sprint is very close to Apple and will be the place you go to buy things,” he said.
Finally, Cramer pointed out that Apple is an even better deal when it is compared to overvalued stocks like Twitter (NYSE:TWTR). “I’m just saying that the stock’s not expensive,” Cramer said on CNBC. “I just think that when you look at the valuation of Twitter versus Apple, Apple’s cheaper than any stock in the Dow.”
More from Wall St. Cheat Sheet:
- Apple Responds to Push for Diversity With Corporate Charter Change
- Analyst: Apple’s December Sales ‘Stronger Than Typical’
- Apple Users Will Get Live Super Bowl Stream
Follow Nathanael on Twitter @ArnoldEtan_WSCS