Cramer: Most market-watchers are wrong. Stocks just aren't that expensive

  • CNBC's Jim Cramer pushes back on some market commentators that see stocks as too expensive.
  • The "Mad Money" host explains why shares of Facebook and Apple are still undervalued.

CNBC's Jim Cramer is tired of analysts and commentators harping on how expensive the stock market has become.

"The more I think about certain calls, certain stocks, certain valuations, the more I recognize that we really have to stop relying so much on the idea of the 'market,' because the valuations for many big-capitalization stocks just aren’t that expensive here," the "Mad Money" host said on Thursday.

Besides some of the most talked-about stocks — specifically Amazon, Netflix and Tesla — the rest of the market, including high-profile plays like Facebook and Apple, just isn't that pricey, Cramer argued.

Facebook's ongoing privacy scandal, for one, has weighed on the social media giant's shares.

On Tuesday, even with all the tariff news, Facebook still took its place among the headlines when the company was issued the maximum possible fine by the U.K. Information Commissioner's Office for being opaque about how it harvested user data.

"The fact is Facebook sells for just 22 times next year’s earnings estimates, and at the end of the day, that’s all that really matters," Cramer said. "The only thing that the investigation has done is shrink the stock’s price-to-earnings multiple ... which is another way of saying the stock’s cheaper than it deserves to be."

Despite the fine, shares of Facebook rose in Thursday trading, hitting a new 52-week high.

Apple's stock is also not being valued the way it should be, the "Mad Money" host said after shares closed up 1.68 percent.

He argued that the iPhone maker's price-to-earnings multiple of almost 14 times next year's earnings estimates was fine when the company just made smartphones, personal computers and tablets.

"But the Apple we all know now is the subscription play that we pay money to every month, just like we do with Netflix, with Spotify, with Costco [and] with Amazon," Cramer said. "That’s a sticky stream, one we'll probably never kick. Fourteen times earnings for Apple is now outrageous. Outrageously wrong, especially given the company’s nearly $300 billion cash hoard."

And Cramer isn't just seeing this pattern in the big-cap technology names. Shares of Johnson & Johnson trade at 15 times next year's earnings estimates, an inexpensive valuation for what Cramer regards as a "premier American company with the best balance sheet in the world."

"We're at a strange time," he said. "The vast majority of commentators seem to think the market is ridiculously expensive. To me, the only way the market’s truly expensive is if you believe that 2019 is going to be a nasty, horrendous year where there’s a full stop to all businesses, a la the Great Recession from a decade ago."

But as it stands, 2019 doesn't look like it's going to be a difficult one for stocks or the companies behind them, the "Mad Money" host said.

He wondered if market-watchers were "conditioned" by the 2008 financial crisis to see stocks as costly at this point in the cycle, even if they actually aren't.

"I’m making the case that perhaps we should just value the market as it is, with a lot of cheap big-cap stocks and some expensive ones," he said. "When you do that, you don’t need to fear the Fed or the tape. It’s a nice, benign and ... I think lucrative way to look at things."

WATCH: Cramer offers a fresh take on big tech valuations

Disclosure: Cramer's charitable trust owns shares of Amazon, Facebook and Apple.

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