Own Apple, do not sell it – the stock could have more potential

Apple gained nearly 5% Wednesday, but CNBC's Jim Cramer said that there may soon be even more potential.

"That's why I always say that I do not exchange it," said the animator of "Mad Money". "With this quarter, we have yet another reason to stay with Apple, and even after the fantastic race of today, I think it will prove to be a real boon because of its membership in the company. 39, economy of subscriptions.

Apple reported that iPhone sales, which historically constituted its biggest source of revenue, plunged 17 percent from the year before. He said this trend could continue, but that did not stop the rebound in action on Wednesday. Shares of the iPhone maker earned $ 9.85 during the session, exceeding $ 210.

Cramer said the company is going through a "paradigm shift" from a device manufacturer to a large service provider.

In its second quarter report, Apple revealed an installed base of 1.4 billion devices. He has reported 390 million paying subscribers, which could reach 500 million in the near future and translate into $ 11.5 billion in high-margin sales, he said.

"The title caught on fire today because it has become impossible to deny the power of this metamorphosis," said Cramer. "When I say that there is a paradigm shift, I mean that two years from now, this subscriber base will deeply define how we judge the stock. from Apple.We are already on the way to a world where the key metric is subs, not iPhone sales. "

At first, most analysts who cover Apple were not sure that the technology giant will become a service company, he said. Analysts were so focused on the iPhone that they did not care about Apple's other fast-growing wearable products, he continued.

Over the years, service revenue has continued to grow and the leadership has decided to accept this segment. In January, Apple had announced bad news to take a step ahead and had revealed that it would stop disclosing the number of units sold each quarter, which many described as a terrible decision, declared Cramer.

"In the future, this is going to be seen as a subscription company with a great business model of razor / razor blade: the phones are the razor, the services are the blade where they really earn their money," he said. declared. "Before Apple started to release its service revenues, the stock tended to sell for about 11 times its profits, and now it is trading at 16x earnings because it offers a better mix of activities." , both equipment and services. "

The paradigm shift is still underway and investors are still trying to understand it, said Carmer.

Watch the complete segment here

Major US indices all fell during the session as investors begin to worry that the stock market has been too strong for its own good, Cramer said.

The Dow Jones Industrial Average lost about 163 points, while the S & P 500 and the technology-driven Nasdaq Composite dropped 0.75% and 0.57%, respectively.

"We had a fantastic race, so I bless you to sell a little tomorrow," said the host. "But other than that, I think we're in great shape, a little overheated, most certainly, but I still think it makes sense to stay the course."

The Dow Jones recorded the best four-month rally to start the year observed since 1987. The Nasdaq recorded its best result of the same period since its big rally in 1999. Nobody wants 2019 to look like these two years said Cramer.

What should be your next move? Read more here

Beyond Meat, the food company behind the meatless Beyond Burger, is expected to debut in the public market this week. Carmer said the title was worth buying – at a price of $ 35 or less per share.

The plant-based meat manufacturer has set the price of its shares at $ 25, compared with $ 19 to $ 21 previously. The stock could climb to $ 30 once it has started trading, and investors should be cautious if it climbs above $ 35, he said.

"I think it's exactly the kind of growth story that the stock market tends to adore.In the course of a year already rich in IPOs, Beyond Meat is the one who knows the fastest growth, "said Cramer. "I doubt that this is another Lyft, where income growth was already slowing down when the company went public."

The company recorded a net loss of $ 29.9 million on a turnover of $ 87.9 million in 2018.

Get to know the IPO here

When Chegg's CEO, Dan Rosensweig, first appeared in "Mad Money" in early 2016, the stock traded at its all-time low at less than $ 4.

Three years later, the stock was listed at the close of Wednesday at $ 34.74.

"The transformation began in this show," Rosensweig told Cramer.

Now the textbook and educational platform fuel the everlasting needs of the public to keep learning, according to the chef. The more people need to learn, the more they will need to learn more often, and they will have to continue learning for their future and their career, he said.

"We believe that we have to believe in the inevitable," Rosensweig said. "And the answer is that we believe in all of this."

See the full interview here

During the flash game of Cramer, the host of "Mad Money" quickly comments on the stock picks of the day.

Kohl's Corp .: "Kohl's is run by the fabulous [CEO] Michelle Goss, who does a great job. Stock strongly shorted, it makes no sense. I know that the quarter will not be so great, but I say [buy]. "

Exxon Mobil: "You're not going to hurt yourself with a 4% return by buying Exxon at these prices, but it's no longer my favorite. [CEO] Mike Wirth does a dynamic job at Chevron, although my friend [CNBC’s] David Faber made me feel like: "wow, maybe they'll come make an offer for Anadarko after [Occidental]but I prefer Chevron to Exxon. "

Delta Air Lines Inc .: "It's a very inexpensive stock with a profit at 8 times.I will not tell you to call the crate.I will tell you that it's cheap . "

Disclosure: The Cramer Charitable Trust holds shares in Apple, Kohl's and Anadarko.