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In Aug 10’s Lightning Program, I was expecting a heated Lightning Round program with lots of stock mentions due to the macro-economic worries. It was surprising to see only four stock calls, excluding one alternative. All of Jim Cramer’s calls were bullish this time. I have investigated these stocks from a fundamental perspective, adding my O-Metrix Grading System where necessary. Here, is a fundamental analysis of these stocks from Cramer's Lightning Round (Data obtained from Finviz/Morningstar and is current as of Aug.10):

Stock Name

Ticker

Cramer's Suggestion

O-Metrix Score

My Take

Cummins Inc.

CMI

Buy

3.53

Hold

Merck & Co.

MRK

Buy

2.69

Buy Later

SunOpta, Inc.

STKL

Buy

8.35

Long-Term Buy

Las Vegas Sands Corp.

LVS

Buy, but alternative is better

3.53

Neutral

Wynn Resorts

WYNN

Buy

2.47

Neutral

Cummins Inc.: Buy buy, buy and buy some more." says Cramer. Cummins is the only stock he favors in its industry.

As of the Aug 10 close, the company was trading at a P/E ratio of 11.30, and a forward P/E ratio of 8.1. Estimated annualized EPS growth for the next five years is 5.0%. Profit margin in 2010 was 9.3%, while it paid a 1.86% dividend last year. Earnings increased by 143.66% this year, and 108.35% this quarter. ROA and ROE are 14.55% and 33.03%, respectively. Its O-Metrix score is 3.53, whereas debt-to assets ratio is slightly going down for the last five years. Institutions own 85.45% of the stock, and it is currently trading 28.83% lower than its 52-week high. Target price is $136.92, which implies a 58.7% upside potential. It returned 10.8% in the last twelve months. However, the stock is highly volatile, and insiders have been mostly selling stocks for a while. The stock is cheap but expectations for the next 5 years is not very high.

Merck & Co.: "I have disliked it ... here's a change of position ... it yields 5%. I am changing my tune. I said if Merck ever got killed, I would buy it ... I'll buy it." Cramer comments.

As of Aug 10, the drug manufacturer shows a trailing P/E ratio of 32.2, and a forward P/E ratio of 7.74. Analysts expect the company to have a 5.5% annual EPS growth in the next five years. With a profit margin of 6.1%, and a dividend yield of 5.10%, Merck& Co. is an enjoyable stock for dividend lovers. However, the stock has a poor O-Metrix score of 2.69, and it returned -14.6% in a year. Insider transactions have increased by 39.04% in the last six months, while institutions own 73.36% of the stock. Debts and assets are increasing sharply. Target price implies a 33.8% increase potential, and it is currently trading 19.97% lower than its 52-week high. Earnings increased by 171.49% this year. Moreover, it has a five-star rating from Morningstar. Although it was a rough year for Merck & Co., it promises a much better future. However, I would rather wait to see whether profit expectations hold or not.

SunOpta, Inc.: Cramer says that this is “what you buy when you want to speculate.” The company has a P/E ratio of 25.3, and a forward P/E ratio of 10.6, as of Aug 10. Analysts estimate a 30.00% annualized EPS growth in the next five years. It has a profit margin of 6.5% with no dividend policy. Debt-to equity is 0.2, far better than the industry average of 1.3. Earnings increased by 291.73% this year. SunOpta has an admirable O-Metrix score of 8.35, although it pays no dividend yield. Target price indicates a 62.2% upside potential, and it is currently trading 41.45% lower than its 52-week high. P/S and PEG ratios are both 0.4. SunOpta returned -2.5% in the last twelve months, whereas debts are going down for the last three years. Average analyst rating for SunOpta is 2.10 (1=Buy, 5=Sell). If analyst estimates hold, this stock is capable of returning serious profits in the long-term.

While Cramer says that Las Vegas Sands is “really good,” he is “going to go with Wynn Resorts.” Here is a brief comparison between these two companies:

Current as of Aug.10 close.

LVS

WYNN

P/E ratio

27.5

44.6

Forward P/E ratio

16.4

22.0

Estimated EPS growth for the next 5 years

15.5%

15.0%

Dividend yield

-

1.49%

Profit margin

12.4%

7.7%

Gross margin

45.3%

36.4%

Upside movement potential

42.9%

23.2%

Las Vegas Sands is trading 28.93% lower than its 52-week high, while Wynn Resorts is trading 21.72% lower. Las Vegas Sands returned 46.3% in the last twelve months, and Wynn returned 54.4%. O-Metrix scores of Las Vegas Sands and Wynn Resorts are 3.53 and 2.47, respectively. Analysts give a 1.70 recommendation for Las Vegas Sands, and a 2.60 recommendation for Wynn Resorts (1=Buy, 5=Sell). Both of the companies are highly volatile, and they have poor O-Metrix scores. I would look for more profitable ones that are priced with low P/E ratios.

Source: Jim Cramer's Latest Buy List