Trading the Verizon-iPhone News
The call may seem obvious, but Cramer thinks Apple is a “terrific” play off the news that Verizon will carry the iPhone, starting in the first quarter of 2011.
“I think it’s big for Apple,” Cramer said during Wednesday’s Stop Trading!, predicting the new business could propel AAPL to $300. “I want to buy Apple into any weakness.”
AT&T, which has held an exclusive agreement with Apple to sell the handset since it first launched in 2007, is still a buy, though, Cramer said. Even if only for its hefty 5.8% dividend yield at a time when Treasurys were returning so little.
But Cramer likes Verizon , too, saying it was a “remarkable company with many, many cylinders firing.” He predicted the stock could reach $35.
One of the best trades off the iPhone’s meteoric growth might be American Tower. Cramer said the increasing need to handle vast amounts of data, which translates into more towers, would be a boon for this company.
In retail, Cramer endorsed Family Dollar for its exposure to both a strong food-stamps business and the middle class’ switch to private-label products from brand names.
“The trade down’s alive and well,” the “Mad Money” host said.
Prudential Financial hurt its share price by announcing an equity offering in order to pay for the AIG assets it is purchasing, something the company had said it wouldn’t do.
“Even though this [deal] is completely additive,” Cramer said, “[the offering] just kills the stock.”
Cramer does remain positive on Prudential, though.
Finally, Cramer cited a Citigroup report that explained how good the research-and-development tax credit would be for semiconductor companies. If these kinds of initiatives were passed, he said, “then we will start getting job creation.”
“I don’t think we’re going to get it yet,” Cramer said. “But we do need help from the government still.”
When this story published, Cramer's charitable trust owned Apple and Prudential Financial.
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