Cramer's Mad Mail Picks: July 14

Includes: BPT, CLB, GNC, ON
by: Efsinvestment

I have been writing about Jim Cramer’s Lightning Round and Mad Money shows for a while and analyzing his stock picks from a fundamental perspective. Seeing that they are drawing quite a bit of attention, I decided to enlarge my investigation on Jim Cramer’s shows, starting with Mad Mail. In this program, Cramer gives more information about the companies he mentions, and talks about them in a more detailed way. Here is a fundamental analysis of Cramer’s Mad Mail mentions from July 14:

On Semiconductor Corp. (ONNN): ONNN returned 32% in a year, and Cramer is bearish on this stock. As of July 15 close, the technology company shows a P/E ratio of 13.72, and a forward P/E of 6.76. Earnings increased by 369.47% this year, while analysts estimate a 14.00% EPS growth for the next five years. Profit margin is 11.57%. Debt-to assets percentage is decreasing with landslides quarter by quarter. Although the company multiple topped recently and target price indicates a 51% upside movement potential, Cramer says that this business is “slow”, and would avoid ONNN for the time being. Insiders have been both exercising options and selling stocks for a while. ONNN is highly volatile and should be avoided.

GNC Holding (NYSE:GNC): I admire GNC’s performance. GNC returned 30% in four months, and Cramer is bullish on it. As of the July 15 close, the Pennsylvania-based company had a P/E of 32.04, and a forward P/E of 17.86. Analysts expect the company to have a 15.00% EPS growth in the next 5 years, while earnings increased by 47.58% this year. Insider transactions for the last six months increased by 31.00%. SMA50 is 8.31%, and SMA200 is 11.25%. The company is currently trading 4.97% lower than 52-week high, while target price implies a 5% upside potential. Although it made some large debts in such a short time, assets will stable them soon. Cramer believes GNC could rise to the mid-$20s. However, I think the company is over-priced.

BP Prudhoe Bay Royalty Trust (NYSE:BPT): BP’s Prudhoe Bay Royalty Trust returned 25.6% in a year, however year-to-date performance of -3.76 was dissappointing. On the other hand, average analyst target price of $65.50 implies a 43% downside potential. I recommend picking a neutral position to oil companies until the price of oil stabilizes. It can be added to portfolios once it decreases to under $100. BPT has been a fabulous dividend payer so far. Here is the recent dividend history of BPT:

Jul 14, 2011


Apr 13, 2011


Jan 12, 2011


Oct 13, 2010


Core Laboratories (NYSE:CLB): Core’s performance is truly admirable. $1000 invested in CLB one year ago is approximately $1468 now. As of the July 15 close, the company was trading at a P/E ratio of 35.5, and a forward P/E ratio of 25.19. Analysts estimate a 16.00% EPS growth for the next five years, which is conservative given the 39.62% EPS growth of last five years. SMA50 is 12.94%, and SMA200 is 23.82%. With a profit margin of 19.6%, CLB pays a 1.21% dividend. Moreover, earnings increased by 36.95% this quarter. Debt-to assets ratio is going down sharply for the last four years. Cramer likes CLB because it is "intregal to the oil renaissance in this country." Insiders have been both selling and exercising options for a while. I believe this is the time to enjoy profits.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.