Cramer’s ‘power ranking’ for communication services: Disney, Alphabet

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As the parent company of Google, YouTube and self-driving car initiative Waymo, Alphabet took silver in Cramer’s communication services power ranking.

The stock has gained a meager 10 percent since the beginning of the year, but the “Mad Money” host attributed that to “guilt by association” with the downtrodden stocks of Alphabet’s online comrades, Facebook and Twitter.

“I think that’s a mistake in judgment by the marketplace. Alphabet’s not in the same boat as Facebook or Twitter. They’ve done a much better job of preventing their platforms from being abused by bad actors, even including the security breach they announced today,” he said, referencing Google’s Monday announcement that a bug left 500,000 users’ account details vulnerable.

Moreover, the stock’s current multiple of 24 times next year’s earnings estimates discounts Google Cloud, Google Play and ancillary segments like Waymo, making the stock “really attractive” on a price-to-earnings basis, Cramer added.

“You’re basically getting these for free,” he said. “In short, the pullback in Alphabet’s giving you a terrific buying opportunity.”

2018-10-08 22:32:00

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