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NEW YORK (
) -- "It's time to change our perceptions of
," Jim Cramer told the viewers of his
TV show Tuesday.
He said that Apple, a stock which he owns for his charitable trust,
Action Alerts PLUS, is not only the best technology company, it's also the best retailer.
When it comes to comparing retailers, Cramer said the metric to watch is sales per square foot of store space. At the high end of that range is
, he said, at $434 of sales per square foot.
Then there are companies like
( WFMI), which rakes in $875 a square foot. Higher still are high-end retailers like
at an incredible $1900 a square foot. All of these numbers make Apple, which generates a staggering $4600 a square foot, the undisputed king of retail.
Cramer said Apple is more than just a tech company, it not only makes computers and cell phones, it sells music, media, advertising and even fashion. He said Ron Johnson, Apple's senior vice president of retail, is perhaps the finest merchant of our time. He said Apple's earnings are only constrained by how many products it can build.
Cramer said it's time to raise his price target on Apple. He now feels the company could earn $22 a share in earnings. Using the average
multiple of 14.8 times earnings, that gives Apples a target price of $325 a share.
Late Chip Rally?
In the "Off The Charts" segment, Cramer went head to head with colleague Tim Collins over the chart of
ETF to see if now's the time to buy into a late summer rally.
According to Collins, the weekly chart of the semiconductor ETF shows the fund barely holding onto its long-term support levels, and despite the relative strength index and stochastics showing slight signs of life, he's not impressed.
Turning to the daily chart, Collins was equally unimpressed, with the chart showing the dreaded "head-and-shoulders" pattern, and several levels of resistance that need to be conquered before the stock can head meaningfully higher.
Cramer, however, said he feels different about the dreaded semiconductor stocks. He said historically September has been a good month for the semis, and with seasonality on our side, along with strong trends continuing in cloud computing, video over the Internet and the mobile Internet tsunami, he sees more semiconductor companies going forward.
He said the estimates for these stocks are simply too low, and the companies will have a hard time not beating them.
In an "Executive Decision" segment, Cramer sat down with Dave Cote, chairman and CEO of
, another Action Alerts PLUS stock, and the next recommendation in Cramer's "Made Here" series of the best American manufacturers.
Cote said that Honeywell focuses on macro trends that will be around for a long time. These trends include energy generation and efficiency and safety, whether it be aircraft safety, home safety or personal safety, among a host of others.
In the aerospace sector, for example, Cote explained that Honeywell is transforming aircraft from an analog to a fully digital cockpit, saving nine cubic feet of space and 450 pounds of weight, all while giving pilots far more data than they've ever had before.
In the automotive sector, Cote said Honeywell is focused on turbochargers, devices that are an offshoot of jet engines, and help cars produce more power while using less fuel.
Turning to the economy, Cote said the U.S. will lag the rest of the world unless it gets its deficit under control, focus on math and science education, and develop a smart energy policy, one that includes both power generation and efficiency. Cote said he's not betting on a double-dip recession.
He said he can't help but be nervous about the future, but noted that overall, orders are "not that bad."
Cramer continued his recommendation of Honeywell as one of America's greatest manufacturing companies.
Value of Limit Orders
"The machines are here to stay," Cramer told viewers, as he commented on
s series entitled,
Man Vs Machine
that is investigating high- frequency, machine trading. But Cramer said investors can still triumph over the machines if they protect themselves.
Cramer said pointedly that the parasites of high-frequency trading are here to stay, and that no one in the government has any interest in protecting the individual investors. He said the lobbies behind this class of trading are too powerful and too clever and run too much money to be stopped. "The regulators just aren't smart enough," he said.
Cramer said we still don't know what happened during the "flash crash," or why the government decided to only cancel some, but not all, errant trades after the sudden market meltdown. Until that is known, he concluded, investors must protect themselves by only using limit orders that specify a minimum or maximum price at which to buy or sell a stock.
Cramer said the investors who used market orders got hurt the most during the flash crash, and only limit orders will make us less vulnerable to the mayhem.
In the Lightning Round, Cramer was bullish on
He was bearish on
International Game Technology
--Written by Scott Rutt in Washington, D.C.
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At the time of publication, Cramer was long Apple, Honeywell.
Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."
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