CNBC’s Jim Cramer reflected on Tim Cook’s accomplishments Tuesday, and his longtime mentor said: apple He accomplished what many in corporate America consider “nearly impossible.”
“We’re hearing a lot about Tim Cook today, and for good reason,” the “Mad Money” host said. “He built the largest consumer-based company in history.”
Cook, who succeeded Steve Jobs and will be replaced by hardware engineer John Tarnas in September, initially faced skepticism about whether Apple could maintain, let alone expand, its dominance. But under his leadership, the company’s stock had risen about 1,900% as of Monday’s close, while also deepening its connection with customers in a way that Cramer said is rare in modern businesses.
Kramer noted that in Cook’s farewell letter, the CEO said he would start his mornings by reading emails from customers. Many people shared personal stories about how Apple products have impacted their lives. As an example, Cook mentioned the Apple Watch’s message about saving lives.
“In every email, I feel the pulse of our common humanity,” Cook wrote, highlighting what Kramer considers a hallmark of his leadership: a deep and genuine dedication to end users.
Kramer said this philosophy helps explain Apple’s success in a field where many companies struggle to maintain an edge. He distinguished between consumer-focused and corporate-driven companies, noting that Wall Street has historically held corporate companies in high esteem because their customers tend to be more predictable. “Business customers tend to be consistent and persistent, whereas consumers are fickle,” he said.
When Cook took over in 2011, Apple’s stock was trading at a P/E ratio in the low to mid-teens. The company currently trades at about 30 times forward earnings, according to FactSet, and is more often associated with higher-margin software companies than lower-margin hardware makers. To Cramer, Apple’s increased valuation reflects Cook’s ability to transform the company from a cyclical device business into a trusted brand with loyal users and more permanent, recurring revenue streams such as iCloud storage and Apple Music subscriptions.
Disclosure: Cramer’s Charitable Trust, a portfolio used by CNBC Investing Club, owns stock in Apple.
