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Cramer: Corporate Tax Cut Among Victims of 'Craziness'Originally published June 1 at 1:24 p.m. EST
Something's got to change. Something. I met with a terrific CEO Thursday of a company that pays a 31% federal tax rate. There was a time when I would be thinking about how much more money this company could make once President Trump and the Republican-controlled Congress ram through a corporate income tax cut.
If we got a dream 15% rate, then the company's stock would be radically undervalued on a new earnings estimate and I could see it trading dramatically higher. It might have been ideal to recommend.
Instead, I have to hold back. I barely mentioned the possibility of a lower tax rate to management. It seemed almost atavistic, as there would be a time when fed tax cuts would have been a genuine catalyst. When I mentioned it, we immediately defaulted to all the "craziness" that killed the hoped-for opportunity.
Wednesday, I got plenty of snippets about what Ruth Porat, the fantastic CFO of Alphabet (GOOGL) , was talking about at the Code conference. I like this company so much, my charitable trust has owned shares in it for ages. I think its self-driving car initiative, Waymo, is dramatically undervalued within the company's worth and that perhaps all auto companies have to turn to it for the company's technology. There was another time, though, where I also thought about the possibility of the $47 billion that Alphabet could bring home if companies got a federal tax break on cash they repatriate or bring home to the U.S. I know Alphabet's got a buyback, so this idle cash could really soup things up. But these days, it's simply no more of a factor than the $60 billion that Cisco (CSCO) has overseas that I thought could be earmarked for both buyback and dividend. (Alphabet and Cisco are part of TheStreet's Action Alerts PLUS portfolio.)