Remember all that talk over the summer about how the back-to-school season was going to be terrible? Yeah, that didn’t exactly pan out the way the negativists expected.
Well, now the whispers have changed seasons, this time focusing on the coming holidays. Cramer during Monday’s “Stop Trading!” said he’s heard hedge-fund chatter that apparel makers Phillips-Van Heusen , Jones Apparel , VF Corp. and Polo Ralph Lauren are in for a “very tough” next couple of months.
There’s a flaw to that theory, though, Cramer pointed out. Much like those early summer rumors were wrong for a specific reason—How could anyone know? School had just got out—this latest round of speculation is off for the very same reason. It ain’t even Halloween yet, so it’s way too soon to gauge holiday sales.
Besides, Cramer said, “All four of these companies have told me that business is quite strong and that inventories are lean. And that you’ve got a great opportunity to own these stocks.”
“But you have to understand,” he said, “that there will be stories planted, momentarily, as soon as we get closer to Halloween that all four of these companies are doing badly … [but] there is nothing behind the negative stories, if you talk about the facts.”
Cramer said companies like PVH, JNY, VFC and RL, those that sell into major department stores, are taking share from their smaller competitors and lowering the cost of production—rising cotton prices or not—in the process.
“The more you dig,” Cramer said, “the better the story is.”
Cramer’s $22-a-share fiscal 2011 earnings estimate for Apple “may be too low,” he said, when you take into account the 40 million iPads expected to be sold that year, in addition to the 10 million iPhones that Cramer expects Verizon to sell, starting early next year.
“The numbers are way too low for Apple,” Cramer said.
Finally, China’s need for clean water, via water filtration, should boost business for PerkinElmer .
“I think this company’s 50 percent China within the next five years,” Cramer said.
When this story published, Cramer's charitable trust owned Apple.
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