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NEW YORK ( TheStreet) -- Think the economy isn't getting better? Think again. That was Jim Cramer's lesson to his "Mad Money" TV show viewers Thursday. Cramer said it's no coincidence that as the markets are hitting new five-year highs, unemployment in our country is hitting five-year lows. Things are indeed getting better, said Cramer, and when things get better, investors are willing to pay up for corporate earnings. The logic is simple: More demand equals higher prices, which in turn means better gross margins and ultimately more earnings on the bottom line. That's why investors are willing to pay up for Bristol Myers-Squibb ( BMY) and Johnson & Johnson ( JNJ), said Cramer, and why they're willing to pay up for oil stocks like Schlumberger ( SLB) and pretty much anything and everything that goes into a home, car or plane. Cramer said the only confusing sector in this multiple expansion period is tech. What are investors willing to pay for Apple's ( AAPL) slowing growth? Not as much as before, said Cramer, who owns Apple for his charitable trust,
Executive DecisionIn the "Executive Decision" segment, Cramer checked in with Jim Griffith, president and CEO of Timkin ( TKR), the steel maker that delivered an earnings beat of 16 cents a share earnings Thursday. Shares of Timkin are up 34% since Cramer last featured them on location in Ohio on Oct. 18. Griffith said Timkin is a very different company than it was just a few years ago. He characterized the company not merely as a steel maker but as a technology company bringing knowledge and know-how to its customers.
Griffith said that 30% of the products his company makes didn't exist just a few years ago. With that level of innovation and execution, Timkin can deliver earnings power even at only 50% factory utilization. Griffith was also bullish on Asia, particularly in China, where he said government stimulus is starting to translate into orders for Timkin. He said things are also picking up in India, another big market for the company. Here at home, Griffith noted that low U.S. energy prices are driving profitability for his company as well as for its customers. When asked about the truck market, Griffith said Timkin is seeing a pickup in truck demand in Asia and expects to see the low levels of production in the U.S. to strengthen as well in 2013. Cramer said Timkin typifies everything we want from American manufacturing as well as in an investment. He continued to recommend the stock, saying that 2013 with "be amazing" for this company.
Wake Up, AppleIn the aftermath of Apple's disappointing earnings and the stock's subsequent 12.5% haircut, Cramer said Apple's management needs to wake up and realize that it's a publicly traded company and one that needs to do a better job of explaining itself. Cramer said from Apple's point of view its actions seem justifiable. The company makes some of the best technology products in the world, and makez a ton of money doing so. So why should Apple worry about these nitpicking analysts who want to dissect every component price and change in gross margin? Cramer said that public companies need to pander, at least a little bit, to the analysts if they expect them to continue to be excited about recommending their stock. With Apple's perceived arrogance about answering questions, it's no wonder the analysts were out in droves today downgrading and cutting targets for Apple shares. Apple remains a great company, he said, but it needs to give the analysts at least a morsel of insight or humility in order to keep them happy.
Cramer said Apple could easily prop up its shares with a stock buyback or a dividend boost or a transformative acquisition, but so far management hasn't hinted at any of those, leaving analysts to focus on increased competition and supply constraints. He said the stock has certainly overshot to the downside but may not yet be at its bottom.