“The market was down on Wednesday, but many stocks consolidated gains in a way that showed Jim Cramer that the companies underneath have some seriously strong pricing power,” Abigail Stevenson reports for CNBC.
“‘Sometimes, it just comes down to figuring out who has pricing power — who can raise prices and who can’t,’ the Mad Money host said,” Stevenson reports. “Pricing power refers to a company’s ability to raise prices without resistance. Cramer likes these stocks because they are the ones that bounce back quickly in a marketwide sell-off. And the weak ones in this area will fall behind quickly when the market comes back because their earnings-per-share numbers come into jeopardy.”
“One of the reasons Cramer always says to own Apple, not trade it is because Apple represents the ultimate strength of pricing power,” Stevenson reports. “‘I think that those who sold Apple on [the iPhone SE] announcement didn’t understand the signature positive of this new phone is that even though it is smaller, Apple can still command a high price for its wares,’ Cramer said… ‘Apple’s pricing power is legion.'”
Read more in the full article here.
MacDailyNews Take: Yes, it certainly is legion. Apple’s margins are the envy of several industries.