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CNBC's Jim Cramer: Apple Must Buy 4 Companies to Fully Flourish

CNBC's Jim Cramer: Apple Must Buy 4 Companies to Fully Flourish
Jim Cramer (CNBC)

By    |   Monday, 28 December 2015 05:28 AM


CNBC’s Jim Cramer says that Apple Inc.’s stock can soar to even greater heights if only Chief Executive Tim Cook would dip into the corporate coffers and buy four companies.

"Honestly it makes so much sense I can't believe they haven't thought of it themselves," Cramer said on CNBC.

"Many professional investors have come to believe that Apple cannot maintain its earnings momentum because it doesn't have enough large streams of recurring, higher-margin revenue to offset what could be a slowdown in iPhone sales," the "Mad Money" host said.

The first purchase would be for Harman International Industries. “With the company's valuation only around $6 billion, it is the brains of almost every major car brand on the road. So, for less than $10 billion, Apple could have the biggest recurring revenue stream in the Internet of things for automobiles,” CNBC explained.

"Why Apple won't do this is pretty strange if you ask me, because Apple's CarPlay needs to play ball with more companies, just like Harman does, and Harman's stock is no longer expensive," Cramer said.

Second, Cramer recommended Apple buy Pandora. “If Apple really wants to own the music business then it should buy Pandora for $4 billion, which is a drop in the bucket for a company like Apple,” CNBC explained.

“Third, Cramer would reach out to the venture capitalists who still own a good chunk of Fitbit, and then go to CEO James Park and make an offer he can't refuse. This way Apple would own the high-end smartwatch category and the lower end health and wellness brand of Fitbit. Apple may have to overpay for it, perhaps at $8 billion, but it would allow Apple to own the category,” CNBC explained.

“Finally, Cramer would shell out $4 billion to buy Verifone. This would allow Apple to have an installed base of Apple Pay users through its point-of-sale terminal business,” CNBC explained.

Meanwhile, Cook contends that the company’s products are made in China because workers there are more highly skilled than their global colleagues.

“It’s skill,” Cook said in response to a question on CBS' “60 Minutes” from Charlie Rose as to why the company’s products are made in China.

Rose also pressed Cook on the issue. “They have more skills than American workers? They have more skills than German workers?” he pressed.

"Let me be clear," Cook said. "China put an enormous focus on manufacturing, in what you and I would call vocational kind of skills,” he said. “The U.S., over time, began to stop having as many vocational kind of skills,” Cook explained.

“I mean, you can take every tool and die maker in the United States and probably put them in a room that we’re currently sitting in. In China, you would have to have multiple football fields.”

Tool and die makers build and operate tools used in manufacturing. The U.S. Bureau of Labor Statistics estimates that there were about 75,950 tool and die makers in the US in May 2014.

According to the "60 Minutes," about 1 million people in China — many of them working for the huge Apple contractor Foxconn — make most Apple products.

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CNBC's Jim Cramer says that Apple Inc.'s stock can soar to even greater heights if only Chief Executive Tim Cook would dip into the corporate coffers and buy four companies.
jim cramer, apple, stock, cnbc
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2015-28-28
Monday, 28 December 2015 05:28 AM
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