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Cramer is one of the most popular and respected stock pickers. In the week’s first Lightning Program, Cramer talked about respectable companies like Caterpillar (NYSE:CAT), Philip Morris (NYSE:PM) and Ford (NYSE:F). He made six calls in Aug 22’s program, four of them bullish and the other two bearish. 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:

Stock Name

Ticker

Cramer's Suggestion

O-Metrix Score

My Take

Caterpillar

CAT

Buy

5.53

Buy

Peabody Energy

BTU

Buy at $41

5.36

Buy

Enterprise Products

EPD

Cautious Buy

2.32

Avoid

Philip Morris

PM

Top Pick

4.80

Long-Term Buy

USG Corp.

USG

Avoid

N/A

Avoid

Ford

F

Avoid

5.87

Cautious Buy

Data from Finviz/Morningstar. and is current as of August 23.

Cramer remains bullish on Caterpillar, although “everyone hates it”. Caterpillar shows a trailing P/E ratio of 13.7, and a forward P/E ratio of 8.9, as of the Aug 23 close. Analysts expect the company to have a 10.3% annual EPS growth in the next five years. With a profit margin of 7.8%, Caterpillar offered a 2.22% dividend last year.

O-Metrix score of the company is 5.53, while it is trading 28.50% lower than its 52-week high. Target price is $127.80, which implies a 54.0% upside potential. The company had an EPS growth of 39.22% this quarter, and 190.36% this year. Sales rose by 36.71% this quarter. It returned 27.5% in a year, whereas debts are going down for the last three years. Yields look appetizing. Caterpillar is a sweet stock to buy.

"Coal and copper and oil are all going down. I am looking at BTU [Peabody Energy], and am shocked that it is at a 52 week low ... why am I buyer? Because there is a coal supercycle going on and BTU is the best ... I think it is a buy at $41." Cramer comments.

The Missouri-based Peabody, as of Aug 23, shows a trailing P/E ratio of 12.9, and a forward P/E ratio of 7.2. Estimated annual EPS growth for the next five years is 10.0%. Profit margin in 2010 was 12.0%, while it paid a 0.79% dividend last year.

Earnings increased by 37.23% this quarter, and 73.66% this year. Its O-Metrix score is 5.36. Target price indicates an about 74.2% increase potential, while it is currently trading 41.81% lower than its 52-week high. Institutions hold 81.52% of the stock. Peabody returned -0.01% in the last twelve months, whereas debt-to assets ratio is going down since 2007. Yields seem all right. Operating margin is 20.3%, and debt-to equity ratio is 0.5, both of which are way better than their industry averages. Moreover, the company has a four-star rating from Morningstar. I believe current price is an advantageous entry point.

While Cramer is bullish about Enterprise Products, he warns investors to “beware of the negative chatter.”

Enterprise Products has a P/E ratio of 22.7, and a forward P/E ratio of 18.6, as of the Aug 23 close. Five-year annualized growth forecast is 3.5%, which is reasonable given the 3.57% EPS growth of past five years. The company offers an attractive dividend of 6.09%, while the profit margin (2.7%) is way below the industry average of 4.1%.

O-Metrix score of Enterprise is 2.32, whereas it returned 7.9% in a year. Debts keep increasing for the last five quarters. Target price is $47.67, implying a 19.9% upside potential. Institutions own 22.62% of the stock, and it is trading only 8.56% lower than its 52-week high. Operating margin is 5.9%, crushed by the industry average of 49.1%. Enterprise has a high PEG value of 5.3, and its O-Metrix score is truly poor. Moreover, it is overpriced. I would not keep this stock just for its dividend.

Cramer says that Philip Morris had a “monster quarter” and makes a bullish call on it, although he does not like tobacco. The company shows a trailing P/E ratio of 16.0, and a forward P/E ratio of 13.4, as of the Aug 23 close. Analysts estimate a 10.5% annual EPS growth for the next five years. Profit margin in 2010 was 27.5%, and it offered a 3.64% dividend.

Earnings increased by 26.66% this quarter, and 21.06% this year. Target price is $76.00, indicating an 8.1% upside movement potential. O-Metrix score is 4.80, while the stock returned 36.4% in a year. Debts are increasing sharply in the last five years. ROA, ROE, and ROI are 22.54%, 204.34% and 39.62%, respectively. It is trading only 3.40% lower than its 52-week high. Yields are all right. My fair value estimate for Philip Morris is $60 per share. P/B is 33.7 and P/S is 4.4, both of which are well above their industry averages. However, I believe that it will do fine in the long-term.

Cramer is bearish on USG Corp., believing that it could “go below $5." As of Aug 23, the Illinois-based USG was trading at a P/E ratio of -1.9, and a forward P/E ratio of -4.2. Analysts expect the company to have a 43.70% EPS growth next year, whereas it had a -68.97% EPS growth in the last five years. With a terrible profit margin of -13.5%, USG has no dividend policy.

SMA50 and SMA200 are -39.29% and -49.90%, respectively. Target price implies an about 87.6% upside movement potential, whereas it is currently trading 62.98% lower than its 52-week high. ROA is -10.06%, while ROE is -62.51%. ROI is -14.31%. Debt-to equity ratio is 4.4, way above the industry average of 1.3. The company returned -39.7% in the last twelve months, and debts boomed within the last four years. Gross margin is 6.3%, while operating margin is -7.9%. Moreover, the stock is highly volatile. I would never think of investing any money in USG for now.

Ford: “People feel we are going into recession ... the first stock you are going to sell in a recession is an auto company ... it doesn't matter how well they are doing." Cramer said.

Ford shows a trailing P/E ratio of 6.0, and a forward P/E ratio of 5.4, as of the Aug 23 close. Estimated annualized EPS growth for the next five years is 6.7%. Profit margin (5.2%) is higher than the industry average of 4.1%, while it offers no dividend.

Target price is $18.57, which implies an 80.1% upside movement potential. The stock is trading 45.65% lower than its 52-week high, while it returned 8.3% in the last twelve months. O-Metrix score of the company is 5.87. Insider transactions have increased by 85.51% in the last six months, whereas it has a ROE of 786.86%. Debts are going down for the last five quarters. Debt-to equity ratio is 18.6, and P/B is 7.4, both of which are well above their industry averages. If you accept the risk and believe in recovery, then this is your stock.

Source: 4 Buy And 2 Sell Ideas By Cramer