Cramer's Stop Trading! What the Dell (11/20/09)

Stocks discussed on Jim Cramer's Stop Trading! TV Segment, Friday November 20.

Apple (AAPL), Dell (DELL), Hewlett-Packard (HPQ), Warner Chilcott (WCRX), Procter&Gamble (PG), J.M Smucker (SJM), Sonoma (WSM), Tiffany (TIF), Ralph Lauren (RL)

Cramer thinks the tech trend is shifting away from Dell (DELL) and towards Apple (AAPL). Never a fan of Dell, Cramer predicts Hewlett-Packard (HPQ) in its earnings call on Monday will refute Dell's bearish statements about PCs with strong results. While Dell's acquisition of Perot seemed desperate, Hewlett-Packard has been handling its mergers smoothly.

Of Warner Chilcott (WCRX), Cramer said, "When I see secondaries where the stocks is up the next day, it says good things," he said. Cramer praised its purchase of a pharmaceutical division from Procter&Gamble (PG) and compared it to Smucker's (SJM) acquiring Folgers from Procter, after which the jam company "reported a blowout quarter." Cramer thinks Warner Chilcott should see a similar uptick in its stock price.

Cramer thinks the trend of paying up for items is coming back; Cramer would buy Williams Sonoma (WSM), "a quintessential mall stock." He also likes other premium names like Ralph Lauren (RL) and Tiffany (TIF).

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Comments

[brewer]

Dell should take his own advice (for Apple some years ago) and "sell the company and return the money to the shareholders).

HP isn't much different. All PC companies, except Apple, are merely slapping together generic motherboards and shoving the horrible Windows excuse of an operating system on it. The do no real development in hardware, and have never added one iota of value thru software. It's really ironic that we even consider them computer companies at all.

A real computer company develops software.

2009 Nov 22 09:36 AM

[Jon T]

If Dell and HP cannot find a significantly better operating system than Windows sometime soon, it will indeed become a terminal decline...

2009 Nov 22 12:12 PM

[Road Runner]

Jon T, I agree. I just upgraded my laptop from Windows Vista to Windows 7, hoping it would improve my user experience. It didn't. I don't understand what Microsoft is doing with Windows. I liked the look and feel of Windows XP, but I hate Vista and 7.

I'm now thinking of looking into an Apple - a thought that didn't even cross my mind before.

Also, I noticed something in the last 6 months. Many of the "cool people" are getting Apples. You may know these people as the "see and be seen" crowd. Just look around any Starbucks for the people with expensive cloths, expensive purses, expensive sunglasses, perfect haircuts, and nice tans. Apple laptops seem to have become a status symbol like driving a German car or giant SUV. And, where the hip crowd goes, many of us (the wannabes) are soon to follow.

If you don’t live around upper middle class “keeping up with the Jones” types like me, you may not notice this.

Also, young people are begging their parents to buy them Apple laptops. It’s now “all Apple, all the time” with their electronic stuff. Now, that laptop prices have plummeted, paying a couple hundred extra dollars for an Apple is worth it to get something “cool” and “hip”.

All of this is a bad sign for Microsoft, Windows, and the PC industry. Apple is reaching "critical mass" of enthusiasm and market share.


On Nov 22 12:12 PM Jon T wrote:
>
> If Dell and HP cannot find a significantly better operating system
> than Windows sometime soon, it will indeed become a terminal decline...

2009 Nov 22 04:33 PM

[NoGambler]

Dell is not in demise.

It is about to market an android smartphone in China and Brazil.

It will reap pent-up orders from corporations in 2010.

These two things will account for a resurgence of Dell by 2q10.

2009 Nov 22 05:13 PM

[John Cordes]

Dell built it's model on no middlemen, and direct technical support. Dell destroyed it's business when it offshored technical support to India, denied it's own warranties (including purchased) and sold 100s of thousands of machines under spec for Windows XP causing them to freeze and then denying any problem. Dell is crap.

2009 Nov 22 05:20 PM

[Old Trader]

Its my understanding that Dell has brought tech support back "home" precisely because of all of the complaints. Both of my puters ( old HP desktop, "old" IBM Thinkpad laptop) run on XP, and I'm hearing that 7 is leaps ahead of Vista.

Like many, I'm past due to upgrade on hardware, but am holding off to make sure 7 is thoroughly de-bugged...otherwise, I'll look at Apple.


On Nov 22 05:20 PM John Cordes wrote:

> Dell built it's model on no middlemen, and direct technical support.
> Dell destroyed it's business when it offshored technical support
> to India, denied it's own warranties (including purchased) and sold
> 100s of thousands of machines under spec for Windows XP causing them
> to freeze and then denying any problem. Dell is crap.

2009 Nov 22 07:49 PM

[Nettligent]

Microsoft Windows 7 = MS Windows Vista Service Pack 3 with bugs fixes, security patches, window dressing and marketing.
Microsoft is very good at keep selling junks to its customers and nobody put a little din on it.

2009 Nov 23 03:00 AM

[BIWA Geezer]

Dell might have brought back some tech support, but some is still in India. My son's Dell Studio 1535 just had its screen go out. When I bought it for him, I got the extended next day warranty as he is a law student and needs the 24 hour turn around. Anyway, when he called Dell tech support to get the service, he indeed spoke with someone in India. The funny, ironic thing was that when the guy in India asked for his address and my son had to spell Seattle for him - OK, it's not Redmond, but it's close. The good news is that the next business day, my son's screen was replaced and the tech was a local person who showed up with the parts necessary to complete the job on the spot. A one-off story, but Michael, please get your guys in India a US Atlas and show them where Microsoft comes from!

2009 Nov 23 03:18 AM

[Marky61]

I've been using a Mac computer since 1986. Back then, it had a paper-white screen (instead of phosphorous green) and a handle on top of its one-piece case. And you didn't have to know DOS. You just pointed and clicked. Inspired genius. Apple continues to innovate to this day. These machines are extremely reliable and largely impervious to viruses. As far as I'm concerned, Apple is the only computer company on the market. Dell and HP et al are just cheap knock-offs in my opinion. Apple is an example of an American icon that leads the world. Not many of those left.

2009 Nov 23 10:55 AM

[predictorman1000]

Cramer-

Great call ("I don't like it") on SEED the other week! Could be up big today.

2009 Nov 23 11:45 AM

[Gordon Akman]

Oh Cramer doesn't like Dell? I better go out and buy some more Dell. Cramer is very useful to investors. If you do the opposite to what he suggests you do great lol

2009 Nov 23 04:36 PM

[slam stocks]

Windows 7 is not that bad after using for the last few weeks. I agree VISTA was horrible and needed a replacement. The comments are way off topic and still believe paying 2X or 3X does not justify buying an APPL computer.

Anyways, the article is about DELL and not MSFT/AAPL. My computers are by DELL and do agree they've lost their way. Software support is either Phillipines or US, meanwhile Hardware continues to be India. The Software support was below average, although, they speak good English, while the Hardware from India was brilliant. People should stop the racial bashing of where the support is from, if the answers and responses are done properly I don't care who provides the help!

Overall DELL does need to improve their overall business. Prices are slightly higher then other mfg, but the software support is hit or miss. The hardware support is good, but the parts are not well made or assembled. I would stay away from this stock and agree HP or AAPL (not the computer) is a much better company to invest.

2009 Nov 23 05:41 PM

[William M. Wright]

Wrong. Dell has not brought tech support back to the USA for retail customers! I stopped buying DELL in 2005 as it was just to hard to work with their "support". Had to buy a few laptops so I figured after 4 years it was better. Wrong! Now just buying a computer and calling with simple non-technical questions is a Friday the 13th Nightmare!!!! You talk with Asia then India then Latin America and none of those three worlds talks to each other. In Latin America they didn't want to talk to another person in their same building to help me resolve and issue. And speaking English and understanding and communicating are different skills. I always have to spend twice as much time on the phone as the old days of talking to a North American call center. I could write a book on the horrible experience I had. DELL computers are fine...the problem is if you have to talk with a human after you buy. The back-off and support will be your nightmare and the people could care less, because your just a foreigner to them.

2009 Nov 23 10:49 PM

[Windsun33]

Not sure I would trust Cramer on his Dell call. He apparently has not looked at what Dell sells nowadays, and assumes it is still selling what it did 5 years ago.

2009 Nov 24 01:24 AM

[H.J. Huneycutt]

I don't think this is true. I bought a Dell desktop PC in June and, low and behold, the wireless card (that I had to pay extra for adding) was a piece of crap!

When I called Dell, I had to deal with a tech support guy from India. He was actually relatively friendly, but I could tell that Dell's policy was to force the user to jump through a gazillion hoops until they finally gave up and decided it wasn't worth their time to pursue the matter.

So I just bought a USB wireless card from a store for about $25 after the guy told me they couldn't replace the card until I physically took the computer apart and did some completely inane tasks. (They refused to admit the wireless card they installed was simply a piece of garbage)

Dell's tech support is a complete joke. You're better off not getting warranties and just taking your chances. They make them so cheap these days, that you could practically buy a new computer for the added warranty service.


On Nov 22 07:49 PM Old Trader wrote:

> Its my understanding that Dell has brought tech support back "home"
> precisely because of all of the complaints. Both of my puters ( old
> HP desktop, "old" IBM Thinkpad laptop) run on XP, and I'm hearing
> that 7 is leaps ahead of Vista.
>
> Like many, I'm past due to upgrade on hardware, but am holding off
> to make sure 7 is thoroughly de-bugged...otherwise, I'll look at
> Apple.

2009 Dec 02 03:11 PM