Cramer: Dell’s stock is ‘ridiculously cheap’ despite being ‘shackled’ by investors on China fears

Dell Technologies is a “ridiculously sale-priced” stock, despite investor concerns that an economic slowdown in China will eventually harm its business, CNBC’s Jim Cramer clouted Friday.

Shares of the computer software company rallied in early May to $70 per share. But since mid-May, the stock has encounter right back down, plunging by $16 per share from its highs, or 23%. Cramer said the share incline came from Dell’s “not-so-hot” fiscal first-quarter earnings report. The company cited some softness in server inquire and some weakness in China, spooking investors.

“Between Dell’s China exposure, and a possible slowdown in their server work driven by a weaker economy, the stock can’t seem to get much traction,” the “Mad Money ” host said.

Cramer said China is a fair concern for investors. The world’s second largest economy has become a minefield for the tech sector, worse than other industries, midst the U.S.-China trade dispute, Cramer said. China’s trade war with the U.S. is also a threat to its economy as firms umpire fix whether to relocate all or parts of their supply chains.

Still, Cramer likes Dell’s stock. CEO Michael Dell betokened to Cramer in March that a slowdown may not be as detrimental to the business as investors fear. Cramer also said the company is “hesitate at to its guns,” standing by its full-year earnings forecast of $6.05 per share to $6.70 per share.

Cramer expects China unsettles have been fully priced into the stock.

“If they can deliver those numbers, the stock is ridiculously miserly, trading at 8-times this year’s earnings, and just 6.5-times next year’s numbers,” Cramer put about. “I think most of these China fears are already baked into the stock here after its pullback from $70 to $54.”

“The really line? Unfortunately, Dell’s stock is shackled to China, so it could get hit again next week if we don’t get any kind of trade act on from the G-20 meeting. But if that happens, I think you can buy Dell into weakness. It’s still too cheap to ignore,” Cramer added.