Cramer's Mad Money - It's Apple Against The World (10/6/11)

by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday October 6.

Apple (NASDAQ:AAPL) vs. The World: Sony (NYSE:SNE), Dell (NASDAQ:DELL), Hewlett-Packard (NYSE:HPQ), Nokia (NYSE:NOK), Motorola (MOT), Research in Motion (RIMM)

Cramer discussed Steve Jobs, CEO of Apple (AAPL), who passed away at the age of 56. Jobs created machines that "made the impossible simple," his Apple Stores have the greatest sales per square foot of anyone. Apple's devices are not only innovative, but look cool and sleek. Jobs seemed to know what the consumer would need 5 years ahead of time, and was one of the greatest CEOs in history.

Although Steve Jobs leaves a towering legacy, Cramer is confident that new CEO Tim Cook will be competent at the helm, since Jobs had been grooming Cook for the position. Apple has been a "purveyor of destructive tech, and is nowhere near done wrecking the competition." Apple has not just created value for its shareholders, but has destroyed value of its competitors. There were businesses that could not keep up with the Apple revolution and either ceased to exist or were taken over. A conservative estimate is that Apple destroyed $350 billion worth of value among its competitors.

Sony (SNE) has lost 48% of its value since the iPod was created and the iTunes store came into existence. Warner Music shed 45% before it was finally taken over. IBM (NYSE:IBM) has re-invented itself in the devastation Apple has caused the PC industry and Hewlett Packard (HPQ) and Dell (DELL) are still scrambling to find their way. Nokia (NOK) and Motorola together have lost $108 billion since the introduction of the iPhone and Research in Motion (RIMM) has shed 52 billion of its valuation, thanks to Apple.

"It's Apple against the world," said Cramer. "And the world doesn't stand a chance."

Chipotle Mexican Grill (NYSE:CMG), Sara Lee (SLE), Netflix (NASDAQ:NFLX), General Mills (NYSE:GIS), ConAgra (NYSE:CAG), Tyson (NYSE:TSN)

Credit Suisse initiated coverage of Chipotle Mexican Grill (CMG) with a 'buy" on its long-term story, but other analysts are pulling in their bullish horns. While it is unlikely that CMG will go the way of Netflix (NFLX), whose stock price has been cut in half since it announced price increases for DVDs, Netflix illustrates that a momentum stock can get slaughtered on one minor mistake. In 2.5 years since Cramer got behind CMG, the stock is up over 500%, but its valuation is rich with a multiple of 35 compared to its 20% growth rate. While CMG's long-term story about quality dining and healthy eating is still intact, in the short time, many analysts are wary about the stock and the current economic environment is volatile. Cramer would take some profits in this popular stock and buy it again at a lower level.

Cramer took some calls:

Sara Lee (SLE), ConAgra (CAG) are not great food stocks. Cramer would buy General Mills (GIS), because its numbers are too low.

Tyson's (TSN) stock rises and falls according to the price of corn. A recent bumper crop may be good news for TSN.

CEO Interview: Robert Petersen, Zagg (NASDAQ:ZAGG)

Zagg (ZAGG) is an Apple derivative company that makes scratch protectors and carrying cases for gadgets. There are worries about competition and if the company's products are proprietary enough. Petersen responded that the industry is fragmented and only the leading players who "have the right products, fill the right shelves and deliver on time" are going to succeed, and Zagg is among them. Petersen reported a strong back-to-school season and expects the best holiday season on record. Apple accounts for 50% of its sales, and demand continues to grow. Cramer is bullish on the stock.


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