The market has had an awesome run in 2019, said Jim Cramer's Mad Money viewers Wednesday. If you have big wins, it would be okay to take some profit. But other than an overheated IPO market, Cramer said he didn't see any red flags.
Some investors have tried to compare the current market to 1987 and 1999 – two other times when the shares liked big gains, they crashed into spectacular fashion. But Cramer noted that today's market is nothing like 1987, when stocks are trading for 29 times on average – far from today's average of 17 times earnings. Back in 1987, there was also a flood of foreign money flowing into stocks, as well as scary portfolio insurance that disrupted the futures markets. None of these things exist today.
In fact, the case that scares Cramer about today's market is not valuation, or the Federal Reserve, or China, it's the tidal wave of new IPOs that threaten to overwhelm investors' demand. Other than that, Cramer concluded, the stock market is still pretty good, even after the 2019 rally.
Cramer and the AAP team add Shopify (SHOP – Get Report) to their bullpen. Find out what they tell their members of the investment club and get into the conversation with a free trial subscription to Action Alerts Plus.
Executive Decision: Advanced Micro Devices
For his "Executive Decision" segment, Cramer sat down with Lisa Su, president and CEO of Advanced Micro Devices (AMD – Get Report), the chip maker who has taken market share from competitor Intel (INTC – Get Report).
Su said that AMD has large end markets that include PCs, games and data centers, all of which remain very strong and continue to grow. She said that 2019 is a major product year for the company, and will see strong growth in sales.
On the question of staggering gross margins, Su noted that the margins increased five points a year ago, but added that when their new products get adoption, the margins will only continue to expand.
Explains that AMD cooperates with the very best companies in the industry, including Sony (SNE – Get Report), Amazon (AMZN – Get Report) and Apple. That's part of the reason why AMD could celebrate their 50th anniversary this week.
Know Your IPO
In his "Know Your IPO" segment, Cramer at Beyond Meat, the plant-based food company was debuted under the BYND ticket. Beyond the meat on Wednesday night, their original public offer was priced at $ 25 per share. The company plans to sell 9.6 million shares at that price and increase over $ 240 million.
Beyond Meat is already one of the fastest growing food companies in America, and if plant-based meat becomes something like plant-based milk, this company has a lot of space to grow. Its products mimic the look, feel and packaging of ordinary burgers and sausages, but are designed to be better for you and better for the environment. Beyond meat products, it is already available in 17,000 stores across the country.
For their finances, Beyond Meat saw 170% revenue growth last year, but in the midst of the expected IPO range, Cramer said the company will trade 17 times last year's sales. But when looking at 2019 sales, the valuation falls to just six times sales.
While valuing a company based on sales, not earnings, may seem dicey, Cramer noted earlier IPOs, like Pinterest (PINS and Zoom Video (ZM trade at 20 and 50 times sales, respectively. He said Beyond Meat is a purchase under $ 35 per share.
In his second "Executive Decision" segment, Cramer also joined Dan Rosenweig, president and CEO of Chegg (CHGG – Get Report), student company with shares that has risen 550% over the past five years, including 22.3% so far in 2019.
Rosenweig said students today learn more and learn more often than ever before, which means they need more help. that there are 36 million high school students and university students around the world, and other students who have partial degrees or participate in other programs.
Chegg's technology simply did not find Rosenweig five years ago. G resources for students for as little as $ 14.95 per month.
When asked about their reputation, Rosenweig said most schools and professors welcomed and encouraged Chegg's help. Chegg does not encourage cheating, nor does it have screen papers for download, he added.
Key Metric for Apple
In its "No-Huddle Offense" segment, Cramer reminded viewers that Apple is no longer a gadget maker. Therefore, stocks were able to explode 4.9% on Wednesday, although iPhone sales, the company's flagship product, declined by 17% for the quarter.
Cramer said the key value for Apple is no longer units or sales, its subscribers, as services revenues have now peaked at $ 11.5 billion. It's important, he said, because subscription companies are valued differently than entities. That's part of the reason Apple has seen its valuation rise from 11 times earnings to 16 times earnings, and why this valuation is likely to continue to rise.
On real money, Cramer, with his opinion of Apple, owns it, does not trade it. Get more of his insight with a free trial of Real Money.
In the Lightning Round, Cramer was bullish on Kohls (Get Report), Exxon Mobile (XOM – Get Report), Chevron (Get Report), Delta Air Lines, Arrowhead Research (ARWR) – Get report), Wayfair (W – Get Report), Varonis Systems (VRNS – Get Report) and Palo Alto Networks (PANW – Get Report).
Cramer was bearish on Allergan Report.]
Introducing TheStreet Courses: Financial Titans Jim Cramer and Robert Powell bring to you their market knowledge and investment strategies. Learn how to create tax-efficient income, avoid peak errors, reduce risk, and more. With our courses you have the tools and knowledge needed to achieve your financial goals. Learn more about TheStreet Course on Investment and Personal Finance here.
Search Jim Cramer's "Mad Money" trading recommendations with our exclusive "Mad Money" Stock Screener.
To watch repeats of Cramer's video segments, visit the Mad Money page on CNBC .
To sign up for Jim Cramers free Booyah! newsletter with all its latest articles and videos, please click here.