Yet again, another analyst released a report that managed to take the stock of the world's largest company down 3 percent on Tuesday. Jim Cramer has seen this happen many times and still maintains that it is better to hold Apple than trade it.
According to analysts at Credit Suisse, Apple has cut up to 10 percent of its component orders due to weak demand for the iPhone 6S.
"I'm always thrilled to see any research department doing real field work on any company, and this Credit Suisse report sure sounds authoritative in its suggestion that earnings estimates could be too high based on the firm's channel checks," the "Mad Money" host said.
After reading the note, Cramer understood how it could make investors feel uncertain about earnings. The 6 percent cut made sense if iPhones were truly not selling as well as people think. The Credit Suisse report gave Cramer the impression that other analysts were about to get on board and start slashing Apple estimates, too.
However, Cramer has seen in the past that analysts frequently make these calls based on weak supply chain data or negative channel checks. This kind of data will prompt investors to dump the stock, and then buy it back later when it turns out that the story was wrong or the narrative changes.
"In short, judging Apple based on these channel checks from its suppliers tends to be a mistake," Cramer said. (Tweet This)
The reason Cramer found this channel check to be so hard to swallow is that Wall Street just heard from three crucial Apple cell phone suppliers — Cirrus Logic, Qorvo and Skyworks Solutions — and each indicated business is still strong.
Cramer did take into consideration that no company is allowed to talk about Apple specifically. Yet, he knows from body language that the company executives were talking about Apple when they cited robust orders.
But, to believe this negative Credit Suisse report would mean that there has been a dramatic decline in iPhone orders in the last 10 days since these companies reported, or that all three companies are dissembling.
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"Call me incredulous. I just don't think that is the case," Cramer said.
Ultimately, Cramer is unwavering in his view that Apple's stock should be owned, not traded. While the field work from Credit Suisse is certainly powerful, Cramer knows from many calls based on similar research have historically been wrong.
So, while many investors may choose to sell Apple, Cramer warned that they may not be able to buy the stock back at lower levels if this report turns out to be a false read.
"I say, why not just hold Apple through this decline and recognize just how wrong this kind of trading call has been during one of the greatest multiyear stock rallies in history," Cramer added. (Tweet This)