Cramer Remix: Own Apple, don’t trade it — The stock could have more upside

Apple rallied close to 5% on Wednesday, but CNBC’s Jim Cramer said there could soon be even more upside.

“That’s why I every time say own it, don’t trade it,” the “Mad Money” host said. “With this quarter, we got yet another reason to stick with Apple, and in spite of that after today’s terrific run, I think it will turn out to be a real bargain because of its embrace of the subscription economy.”

Apple described that iPhone sales, historically its largest source of revenue, plunged 17% year over year. It told that trend could continue, but that didn’t stop the stock’s Wednesday rally. Shares of the iPhone maker gained $9.85 during the sitting, closing above $210.

Cramer said the company is going through a “paradigm shift” from being a device industrialist to a big-league service provider.

In its second-quarter report, Apple revealed an installed base of 1.4 billion devices. It relented 390 million paid subscribers, which could reach 500 million in the near future and translate into $11.5 billion in high-margin yard sales, he highlighted.

“The stock caught fire today because it’s become impossible to deny the power of that metamorphosis,” Cramer stipulate. “When I say this is a paradigm shift, what I mean is that, within two years, this subscriber base pass on profoundly define the way we judge the stock of Apple. We’re already well on our way to a world where the key metric is subs, not iPhone purchasings.”

Initially, most analysts that cover Apple were unsure about the tech giant rebranding itself as a employment company, he recalled. The analysts were so focused on the iPhone that they did not care about Apple’s other fast-growing wearable issues, he continued.

Over the years, its services revenue kept growing and leadership decided to embrace the segment. In January, Apple preannounced some bad rumour to get ahead of the curve and revealed that they would stop disclosing the amount of units it sells each accommodate, which many saw as a terrible move, Cramer said.

“In the future, it’s gonna be seen as a subscription company with a terrific razor/razorblade establishment model: the phones are the razor, the services are the blade where they really make their money,” he said. “More willingly than Apple started breaking out its service revenues, the stock tended to sell for about 11-times earnings. Now it sells for 16-times earnings because it’s got a change ones mind mix of businesses, both hardware and services.”

The paradigm shift is still unfolding, and investors are still trying to wrap their shilly-shallies around it, Carmer said.

Watch the full segment here

The major U.S. indices all declined during the session as investors start to hassle if the stock market has been too strong for its own good, Cramer said.

The Dow Jones Industrial Average shed about 163 substances, while the S&P 500 and the tech-heavy Nasdaq Composite fell 0.75% and 0.57%, respectively.

“We’ve had a terrific run, so I am blessing you to do some sell down the river tomorrow,” the host said. “But other than that, I think we’re in fine shape. Somewhat overheated, most categorically, but I still think it makes sense to stay the course.”

The Dow Jones had the best four-month rally to start the year it’s noticed since 1987. The Nasdaq had its best showing in the same period since its big rally in 1999. No one wants 2019 to look be fond of those two years, Cramer said.

What should your next move be? Read more here

Beyond Meat, the food company behind the meatless Beyond Burger, is set to debut on the public market this week. Carmer said the traditional is worth buying — at or below $35 per share.

The plant-based meat maker priced its shares at $25, up from the its inventive $19 to $21 offering. The stock could surge to $30 once it starts trading, and investors should be careful if it climbs above $35, he said.

“I think this is exactly the kind of growth story that the stock store tends to adore — in a year that’s already been chock-full of IPOs, Beyond Meat is the fastest grower amid them,” Cramer said. “I doubt it will be another Lyft, where the revenue growth was already decelerating by the spell the company came public. “

The company reported a net loss of $29.9 million on revenue of $87.9 million for 2018.

Get to know the IPO here

When Chegg CEO Dan Rosensweig first appeared on “Mad Money” in early 2016, the tired was trading at its all-time lows under $4.

Fast forward three years later: the stock has matriculated to Wednesday’s $34.74 finish.

“The transformation started on this show,” Rosensweig told Cramer.

Now the textbook and education platform is fueling the public’s permanent needs to keep learning, according to the chief. More people need to learn, they will need to learn various things more often, and they will have to keep learning for their future and careers, he said.

“We on in believing in the inevitable,” Rosensweig said. “And the answer is we believe in all of that.”

Catch the full interview here

In Cramer’s lightning round, the “Mad Money” host zips through his thoughts far callers’ favorite stock picks of the day.

Kohl’s Corp.: “Kohl’s is run by the fabulous [CEO] Michelle Goss, who is doing a massive job. Heavily shorted stock, that makes no sense. I know the quarter’s not gonna be that great, but I say [buy].”

Exxon Mobil: “You’re not affluent to get hurt with a 4% yield buying Exxon at these prices, but it’s no longer my favorite. By the way, I think [CEO] Mike Wirth’s doing a dynamite job at Chevron, although my SW compadre [CNBC’s] David Faber made me feel like: ‘wow, maybe they’re going to come and bid for Anadarko after [Occidental], but I do proffer Chevron to Exxon. “

Delta Air Lines Inc.: “It’s a very cheap stock at 8-times earnings. I’m not gonna tell you to cestos the register. I’m gonna tell you that it’s cheap.”

Disclosure: Cramer’s charitable trust owns shares of Apple, Kohl’s, and Anadarko.