There’s reason to celebrate this week – two Cramer picks, Apple and Charter Communications, are up more than 40% since he recommended them. Who says this segment is all about self-flagellation?
Charter climbed 41%, but it’s valuation is stretched about as far as it can go, Cramer says. Any increase in price derived from the company’s refinancing of debt is over, and Charter is more expensive and a worse company than Comcast. It’s probably time to take some, if not all, off the table.
There are a couple of reasons to take profits in Apple. One is a basic rule in Cramerica: Bulls make money, bears make money, hogs get slaughtered. The stock is already up 41% this year. Cash in your chips and start playing with some of the house's money. The other reason is that the bar has been set so high for the iPhone it might not live up to expectations. Apple stock could also follow the same pattern as when the product was announced – initial spike before then a drop the day of. Why get caught with your pants down? If you’re dead set on owning some Apple, sell a bit, then buy it all back after the stock takes a hit, which Cramer believes is inevitable.
Now onto other business. On May 18, Cramer didn’t quite recommend that anyone buy Delphi, because it’s on the pink sheets and he doesn’t recommend buying or selling pink-sheet stocks. Since then Delphi is up 34%, and he doesn’t quite recommend that you sell some.
Cramer recommended Sears Holdings in last week’s Game Plan, but it reported a terrible quarter. That doesn’t mean you should sell it, at least as far as he’s concerned. “Eddie Lampert sees what we see,” Cramer says, referring to the problems the company is having. Lampert gets the benefit of the doubt and so does Sears.
Bottom Line: Time to sell most of your Charter, time to sell a lot of Apple well ahead of the iPhone launch, and no, it’s not time to jump ship with Sears.
Jim's charitable trust owns Sears Holdings.