Jim Cramer: After 10% correction, buy Apple stock

Tiernan Ray reports for Barron’s that Jim Cramer is recommending Apple Inc. (AAPL):

We think this is a buying opportunity for the long term — a 10% discount for a company trading at 10x, excluding cash, with a very strong product profile that just enjoyed a record launch with 100% growth in preorders for its iPhone 5. Apple also has strong upcoming products in the iPad mini, for the new refreshed iPad and for the eventual iTV. The company also commands huge cash position at $120 per share. That’s not to mention the powerful ecosystem that surrounds all of Apple’s products. By now it’s well known that the iPhone 5 has had supply constraints, and not demand issues — several surveys have shown that 75% of the Apple Stores are out of the device, and that there is still a three-to-four-week wait at the online stores. The 5 million units sold in the first weekend was a new record, coming in better than the 4- million-unit comparison for the iPhone 4S. But expectations had gotten aggressive, with analysts initially putting the number as high as 10 million.

Read more in the full article here.

Bruno J. Navarro reports for CNBC, “The pullback in Apple’s stock price Tuesday likely means the market is doing what it’s supposed to be doing, ‘Mad Money’ host Jim Cramer said. “’Throughout these last few percentage points of gains, we haven’t had the kind of breather I like, a breather that inspires the belief that it’s all over,’ he said. ‘Some of that is due to the miraculous run in Apple, which I believe could be overdone for the moment.'”

“With Apple, Cramer said smart investors need to know how to react,” Navarro reports. “‘You have to buy, not sell, weakness once a stock stops climbing. But once that happens and we get a reversal we must be in no hurry to buy because we have to let the freaker-outers run for the hills,’ he said. ‘Don’t forget that Apple fell from $636 to $529 when it bottomed last time and we know from our chartists that could mean we see Apple trade down to the $560 level before we get a real bounce back up. Can you imagine how nuts and crazed people will be when that $66 stock goes to $56? Oops, I forgot to multiply by ten.'”

Read more in the full article here.

15 Comments

  1. These guys play on hype. The market crash was a sign that the system broke down. Analysts would not want to accept that they perpetuated the system that caused the crash.

  2. Cramer is a self-admitted manipulator. The “self-admitted” part is the main difference between Cramer and many other stock analysts.

    Cramer sensationalizes his picks, but he isn’t all bad. I just don’t bother listening to analysts and pundits. If they were right often enough to be worth listening to, then they would be self-made millionaires who wouldn’t need to shill stocks publicly for a paycheck. I would rather flip a coin.

  3. Isn’t that great. For 2 weeks, Jim has been telling everyone to ignore the diversification and sell Apple and buy Google. Jim, Android is FREE and Google is an advertising company. Apple is a very diversified phone, computer and device technology company with other services and products like software, cloud, media, e-books, …

    So JIM, WHAT DOES SELLING APPLE FOR 2 WEEKS HAVE TO DO WITH BUYING Google? And, you never said that Apple is going to pull back 10%. Sell now and buy in 2 weeks.

    Now you have 20/20 hindsight. Good for you Jim. So does everyone else.

  4. I remember him saying after an Apple Keynote event and product introduction to not buy Apple stock because it will go down the next two or three days and that’s when you need to buy. Unfortunately, Apple’s stock just went up, up and up and made Jim Cramer look like a total dishrag… wet, limp, and smelly.

  5. unfortunately, apple stock will fall even down. people had higher expectation on iphone 5. but it was a joke. the same thing will go with ipad mini. there are already leak images all over the internet. there is no merit to buy mini. apple doesn’t show any wow effect anymore. it seems quickly to die after Steve Jobs. the company needs ‘wow’. but TIm Cook can’t do it. it is impossible. anyway, stock price will fall another 10% until the end of this year.

      1. If I’m reading “edward” right he actually is saying that this is due to the lousy economy that sucks everywhere and nothing Apple can do about that part. For a change I think he wasn’t trolling.

  6. Cramer crap:
    Apple also has strong upcoming products in the iPad mini <–Based on what actual FACTS?
    the eventual iTV <–Based on what actual FACTS?
    a breather that inspires the belief that it’s all over <–If you're a paranoiac.

    You need a degree in abnormal psychology to comprehend the behavior of the stock market these days. Pathetic.

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