This is scary. Mad Money’s Jim Cramer thinks Apple’s stock is a bargain. Scott Rutt on TheStreet.com:
Investors usually sell Apple on the day of new product launches. He said while this trend may scare off novice investors, it’s actually a huge opportunity in disguise. Cramer said the new product lull that Apple experiences usually lasts for two days, which means by Friday, the stock should be ripe for the picking. He reiterated his $300 price target for Apple.
$300?
Cramer said his $300 target came from simple math. Apple is expected to earn $12 a share this year. This means the stock is currently trading at just 17 times its earnings. Cramer noted that cereal maker General Mills trades at 17 times its earnings, but that company is growing at half the rate of Apple. Cramer said Apple should be trading around 25 times its earnings, based on what other 18% growers fetch for their stocks.
Seriously, this is scary. Based on his record, when Jim Cramer says go this way, going in the other direction might be a better result. Remember what Jim Cramer said.