Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Apple Inc. (AAPL) ‘Needs OMG’: Jim Cramer

Opinions about Apple Inc. (NASDAQ:AAPL) are flying their way around the blogosphere this morning, as shares of the tech giant are down more than 10% on the heels of a mixed first quarter earnings release. Apple slightly missed on the revenue side yesterday (see our recap), and while it did beat the Street’s EPS estimates, the company did issue Q2 revenue guidance 5-10% below analysts’ consensus of $45.6 billion.

Courtesy: Apple Inc. (NASDAQ:AAPL) Press Info

With this in mind, Jim Cramer was on CNBC this morning, calling investors’ sentiment toward Apple “not fair.” More specifically, Cramer argued that even though the company’s first quarter results weren’t a blowout, the valuation is experiencing a “reset.” Here are the highlights:

“The company’s conference call was radically opposite of what everyone was thinking […] the analysts were viciously, viciously trying to figure out […] what do you pay for a company with waning growth, what do you pay for a company that’s not as loved by the customer anymore? And the answer is: well we gotta pay what we pay for Intel, what we pay for Cisco, what we pay for Microsoft.”

On the subject of Apple Inc. (NASDAQ:AAPL)’s guidance, Cramer said that “This is one of these moments, where you’re going through it and you’re trying to figure out ‘what were they doing all along,’ and the answer was they were sandbagging.” For the stock to meet the expectations of bullish investors, Cramer mentioned the following “Look, this company needs OMG and it needs it now […] we need to get beyond the four walls of the canvas here.”

Jim Cramer

Apple Inc. (NASDAQ:AAPL)’s next ‘OMG’ moment will probably not come next quarter, but there’s a chance that it could come by the end of 2013. Aside from the expected new iterations of its iPhone and iPad models, many Cupertino optimists are hoping for an entry into the smart TV space. We’ve discussed before how an ‘iTV’ could add at least a 5% upside to Apple’s bottom line this year.

Likewise, a deal with China Mobile Ltd. (NYSE:CHL) to sell the iPhone 5 (or even the iPhone 5S) in China would serve as another “carrot,” so to speak, pulling shares of Apple Inc. (NASDAQ:AAPL) higher.

Now with $137 billion in cash, though a significantly smaller portion is actually available for immediate use, Apple can also boost its dividend payout. An improved yield will likely drive more income-seeking investors into the stock, but for all intents and purposes, Apple Inc. (NASDAQ:AAPL) may need a new, truly revolutionary product launch to be properly appreciated by investors.

At a mere 9 times earnings and a PEG near 0.5, AAPL shares are clearly cheap, but that’s been the argument to buy ever since the stock began its fall from $705. It’s important for investors to realize that not all of their peers follow the value-based mantra, and some are likely just looking for a new growth platform, whether it’s a TV, an expanded presence in China, or even a smartwatch.

Let us know your thoughts on Apple Inc. (NASDAQ:AAPL) in the comments section below, and for more related coverage, continue reading here:

Apple: Rotten to the Core or Just Bruised

The Great Apple Sale

Apple Q1 Conference Call Recap

Disclosure: I have no positions in any of the stocks mentioned above

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!