Homepage / Technology / Cramer checks the rally's merit by inspecting the Dow's top 10 stocks
Amazon says this Prime Day was its biggest shopping event ever Kudlow says President Trump is 'so dissatisfied' with China trade talks that he is keeping the pressure on As stocks regain their footing, an ominous warning looms Goldman Sachs downgrades Clorox to sell, says valuation is 'unsustainably high' How Satya Nadella has spurred a tripling of Microsoft's stock price in just over four years Kudlow says economic growth could top 4% for 'a quarter or two,' more tax cuts could be coming The one chart that explains Netflix’s stunning comeback US housing starts plunge 12% in June to a nine-month low Aerospace titans Boeing and Airbus top $110 billion in orders at Farnborough Target uses Prime Day to its advantage, logging its 'biggest online shopping day' so far this year Billionaire Marc Lasry sees bitcoin reaching up to $40,000 as it becomes more mainstream and easier to trade These are the 10 US airports where you're most likely to be hacked Amazon shares slightly higher as investors await Prime Day results Wreck of Russian warship found, believed to hold gold worth $130 billion A bullish ‘phenomenon’ in bond market is weeks away from fading, top credit strategist says Stocks making the biggest moves premarket: MS, GOOGL, TXN, UAL, NFLX & more Twitter shares up 50% since late April means most upside priced in, analyst says in downgrade EU fines Google $5 billion over Android antitrust abuse Mortgage applications fall 2.5% as buyers struggle to find affordable homes America may not have the tools to counter the next financial crisis, warn Bernanke, Geithner and Paulson Investors are getting spooked as the risk of a no-deal Brexit rises EU expected to fine Google $5 billion over Android antitrust abuse Ex-FBI chief James Comey urges Americans to vote for Democrats in midterm elections Elon Musk apologizes to British cave diver following baseless 'pedo guy' claim Disney, Comcast and Fox: All you need to know about one of the biggest media battles ever Xiaomi shares notch new high after Hong Kong, mainland China stock exchanges reach agreement The trade war is complicating China's efforts to fix its economy European markets set for a strong open amid earnings; Google in focus Hedge fund billionaire Einhorn places sixth in major poker tournament The biggest spender of political ads on Facebook? President Trump Asian stocks poised to gain after Fed's Powell gives upbeat comments; dollar firmer Stocks are setting up to break to new highs Not all FAANG stocks are created equal EU ruling may be too little, too late to stop Google's mobile dominance Cramer explains how Netflix's stock managed to taper its drop after disappointing on earnings Airbnb condemns New York City's 'bellhop politics,' threatens legal retaliation Amazon sellers say they were unfairly suspended right before Prime Day, and now have two bad choices Investor explains why 'duller' tech stocks can have better returns than 'high-flying' tech names Elon Musk is 'thin-skinned and short-tempered,' says tech VC Texas Instruments CEO Brian Crutcher resigns for violating code of conduct Google Cloud Platform fixes issues that took down Spotify, Snapchat and other popular sites Uber exec: We want to become the 'one stop' transportation app 'What a dumb hearing,' says Democrat as Congress grills tech companies on conservative bias Amazon shares rebound, report says Prime Day sales jumped 89 percent in first 12 hours of the event How to put your medical history on your iPhone in less than 5 minutes Investment chief: Watch these two big events in 2018 Even with Netflix slowing, the market rally is likely not over Cramer: Netflix subscriber weakness debunks the 'sky's the limit' theory on the stock Netflix is looking at watch time as a new area of growth, but the competition is stiff Why Nobel laureate Richard Thaler follows Warren Buffett's advice to avoid bitcoin Rolls-Royce is developing tiny 'cockroach' robots to crawl in and fix airplane engines After Netflix plunge, Wall Street analysts forecast just tame returns ahead for the once high-flying FANG group Roku shares rise after analyst raises streaming video company's price target due to customer growth China is investing 9 times more into Europe than into North America, report reveals Amazon says US Prime Day sales 'so far bigger than ever' as glitch is resolved Netflix is on pace for its worst day in two years US lumber producers see huge opportunity, rush to expand San Francisco to consider tax on companies to help homeless Homebuilder sentiment, still high, stalls as tariffs, labor and land drive up costs Powell backs more rate hikes as economy growing 'considerably stronger' Netflix history is filled with big stock declines – like today – followed by bigger rebounds Intel shares get downgraded by Evercore ISI due to rising competition from Nvidia, AMD Petco aims to reinvent the pet store with something you can't buy online Genetic testing is coming of age, but for consumers it's buyer beware Tech 'FAANG' was the most-crowded trade in the world heading into the Netflix implosion, survey shows Netflix weak subscriber growth may indicate a 'maturity wall' that could whack the stock even more: Analyst This chart may be predicting the bull market's demise Wall Street says Netflix's stock plunge is a ‘compelling’ buying opportunity because the streaming giant ‘never misses twice’ Tesla sinks after Musk tweets, again Boeing announces new division devoted to flying taxis Stocks making the biggest move premarket: NFLX, UNH, GS, AMZN, WMT & more Deutsche Bank downgrades Netflix, but says big subscriber miss is not 'thesis changing' IBM is experimenting with a cryptocurrency that’s pegged to the US dollar North Korea and Zimbabwe: A friendship explained Virgin Galactic spinoff Orbit to launch rockets from the UK with space deal Artificial intelligence will create more jobs than it destroys? That’s what PwC says ‘Treasonous’ Trump and ‘Putin’s poodle:' Scathing headlines follow the Trump-Putin summit China’s fintech companies offer ‘enormous’ opportunity, investment manager says Trump's performance at summit with Putin was 'unprecedented,' experts say Walmart and Microsoft link up on cloud technology as they both battle Amazon European stocks seen mixed amid earnings; Fed’s Powell to address Congress How I knew I should quit my day job and run my start-up full-time: Viral website founder China's stocks have been trounced, but the trade war may ultimately be good news for those shares Billionaire tech investor Peter Thiel bets on crypto start-up Block.one Asian shares subdued open after mixed close on Wall Street; energy stocks under pressure Amazon cloud hits snags after Amazon Prime Day downtime Netflix isn't doomed by one quarter unless people start questioning the long-term investor thesis Tech stocks set to sink on Tuesday after rough evening for ‘FANG’ Netflix plummets after missing big on subscriber growth This wristband lets humans control machines with their minds The U.S. has a rocky history convincing Russia to extradite computer criminals Amazon suffers glitches at the start of Prime Day Jeff Bezos is now the richest man in modern history 'The United States has been foolish': Read Trump and Putin's full exchange Goldman Sachs recommends these 5 highly profitable companies — including Nvidia — to combat rising inflation Goldman Sachs releases 'tactical' stock picks for this earnings season Three red flags for Netflix ahead of its earnings report The bond market may be raising recession fears, but don't expect one anytime soon Cramer: Banks are 'making fortunes' but are still as hated as they were during the financial crisis Putin told Trump at summit: Russia never meddled in US election

Technology

Cramer checks the rally's merit by inspecting the Dow's top 10 stocks

When President Donald Trump tweeted that “business is looking better than ever,” adding that “that just doesn’t happen,” Jim Cramer took the leader of the free world up on his claim.

“It’s worth pondering the question: Is the president right?” the “Mad Money” host said. “The short answer: Yes. At least about the market, he’s right. I say that because I’ve always been of the exact same mindset as the president: it doesn’t just happen. It takes a very special set of circumstances to have a market be this strong.”

But Cramer values skepticism and acknowledged that stocks are trading at historically pricey levels, giving more bearish investors cause to worry about overvaluation.

To clear the air, the “Mad Money” host decided to look at the Dow Jones Industrial Average’s 10 top-performing stocks in 2017 to see if their valuations are justified or overblown.

Up 52 percent year-to-date, the stock of aircraft giant Boeing has rallied on a strong order book and growth in airline traffic, which has increased demand from many of Boeing’s customers.

“The airlines have never been this flush. They’re lining up for planes. Airline traffic is in secular growth mode because of the great middle-class-ification occurring all over the globe. In short, [the move is] merited,” Cramer said.

If Apple were just a mobile phone company, Cramer would balk at its 35 percent run in 2017. But given the fact that the tech giant is, at its core, a consumer products company, Cramer said its valuation is actually still too cheap.

“Apple trades at 14 times earnings versus Clorox. Now, is that ridiculous? Even though its products are every bit as beloved as bleach?” Cramer said, comparing it to Clorox’s 23-times-earnings valuation. “Not only does Apple’s move up make sense, doesn’t it seem like it should be much higher?”

With several tailwinds at its back including accelerating growth and the global paper-to-plastic payment shift, Visa’s stock has enjoyed a 29 percent run since the start of the year.

The only potential threat to Visa is that the company hopes to take China by storm, and if Trump puts sanctions on China, Chinese officials could retaliate against U.S. companies like Visa.

“That would knock a great growth component from what I’m looking for and the stock would go lower. But at that point, you know what you’d be getting? Yes, a buying opportunity,” the “Mad Money” host said.

Having rallied 28 percent year-to-date, McDonald’s 6 percent worldwide growth is impressive for a company as old as established as the popular fast food chain, Cramer said.

“However, with a weaker dollar that translates to higher earnings, new technology that’s improving the experience and the simplified menu … the darned turn is just getting stronger,” he said. “It deserves the run.”

Up 22 percent for 2017, the construction giant has undergone a restructuring of late, laying off employees to right-size the organization and make it profitable again.

“With only a little bit of pick-up in revenues, [Caterpillar] can make a ton of money at the bottom line, and it did so this past quarter. Yet its sales are nowhere near back to where they were before the Great Recession,” Cramer said. “If that ever happens, this stock could easily vault 50 percent, maybe even more. You want CAT to come down, and come down now.”

Cramer said UnitedHealth‘s stock has rallied over 20 percent year to date thanks in large part to Congress’ inability to pass health care, making it the Dow’s token “Trump stock,” in Cramer’s eyes.

“If you believe Obamacare’s collapsing like the president, then you’ve got to own this stock,” the “Mad Money” host said. “I, along with just about everyone else I know, want to buy this stock cheaper than it is. Forget about it.”

Riding the wave of a clothing retail comeback, Nike’s stock has seen a 19 percent run so far in 2017, and after a strong quarterly report, Cramer thinks this is just the beginning of its rally.

Wal-Mart’s 17 percent gain makes sense to Cramer, who sees the low-cost retail giant as one of Amazon’s few worthy opponents.

“That’s why its stock’s been among the best performers in the market. The company, under CEO Doug McMillon, has made so many improvements and it’s going to leverage its huge store base to try to defeat Amazon,” Cramer said. “If I’m right, there’s no way this stock will stay this low.”

After reporting a strong quarter with accelerating growth in the cloud and cash generation galore, Microsoft’s stock should have run more than 16 percent for the year, Cramer said.

“Frankly, that’s just not enough after that remarkable quarter,” the “Mad Money” host said. “How is it possible that Microsoft’s stock hasn’t moved up more? That is the real question.”

American Express’ stock is the only one in the top 10 that Cramer hesitated to defend after a moderate, not great, quarter. But having seen the stock run as it has after similar earnings reports, he gave the credit card giant a pass.

“So let me give you the bottom line: on a case by case basis, which is what we do in Cramerica, I think the president’s right — this market’s doing amazing things. Whatever else you might think of Trump, his assessment of this market is accurate, and if you disagree, what can I say? You know nothing!” Cramer said. “I’ll just put it this way. It’s not hard to imagine these stocks going higher. It’s also relatively easy to argue that almost every single one of them is worth owning right here, and certainly on any dip. What more could you ask for?”

Disclosure: Cramer’s charitable trust owns shares of Apple.

Questions for Cramer?
Call Cramer: 1-800-743-CNBC

Want to take a deep dive into Cramer’s world? Hit him up!
Mad Money TwitterJim Cramer TwitterFacebookInstagramVine

Questions, comments, suggestions for the “Mad Money” website? madcap@cnbc.com

Source: Tech CNBC
Cramer checks the rally's merit by inspecting the Dow's top 10 stocks

Comments are closed.