Seeking Alpha
Profile| Send Message|
( followers)  

Cramer is one of the most entertaining stock pickers on the Street. I have been writing about Cramer’s Lightning Round stock picks for a while. In this article, I have decided to bring together his bullish picks that he mentioned the most. I have investigated these stocks from a fundamental perspective, adding my O-Metrix Grading System where applicable. Here is a fundamental analysis of these stocks from Cramer's recent Mad Money picks.

Stock Name

Ticker

Cramer's Suggestion

O-Metrix Score

My Take

Apple, Inc.

AAPL

Buy

6.61

Top Pick

Baidu, Inc.

BIDU

Buy

4.25

Do Not Buy

ConocoPhillips

COP

Buy

7.41

Buy

The Hain Celestial Group

HAIN

Buy

2.76

Avoid

Data from Finviz/Morningstar, and is current as of August 29.

Apple

Cramer has been on the bullish side of Apple for a while. The company has a P/E ratio of 15.4, and a forward P/E ratio of 12.1, as of Aug 29. Analysts expect the company to have an 18.2% annual EPS growth in the next five years. Profit margin (23.5%) nearly doubles the industry average of 12.2%, while it offers no dividend yield.

Earnings increased by 122.15% this quarter, and 66.91% this year. Target price indicates a 25.6% increase potential. Institutions own 70.44% of the stock, while it is trading only 3.59% lower than its 52-week high. O-Metrix score of the company is 6.61, and it returned 60.8% in a year. SMA20, SMA50, and SMA200 are 3.98%, 7.00% and 13.45%, respectively. While ROA is 27.53%, ROE is 41.99%.

The company owns no debts for the last five years. Gross margin is 39.8%, whereas operating margin is 30.4%. Debt-to equity ratio is 0.0, which crushes the industry average of 8.2. Apple’s financial course was highly correlated with its legendary CEO Steve Jobs. Now that he is retired from his position, I expect Apple to maintain a more stable performance. The stock is back on near $400 levels again.

An iPhone release until the beginning of 2012 will boost the stock. Apple was a great buy when it fell to $350s recently, but I believe that this is still a terrific buy (read a full analysis here).

Baidu

Baidu has been the only Chinese stock Cramer recommends. The Beijing-based Baidu shows a trailing P/E ratio of 64.9, and a forward P/E ratio of 33.0, as of Aug 29. Estimated annual EPS growth for the next five years is 41.7%, which sounds pretty high given the $52 billion market cap. With a profit margin of 46.5%, Baidu has no dividend policy.

Debt-to equity ratio is 0.0, better than the industry average of 0.9. Gross margin is 73.9%, whereas operating margin is 52.2%. ROA, ROE, and ROI are 44.34%, 56.76% and 55.05%, respectively. The stock returned 85.5% in a year, and it has an O-Metrix score of 4.25. SMA50 is 0.93%, and SMA200 is 12.91%. Target price is $184.33, which implies a 28.6% upside potential. The stock is currently trading 13.65% lower than its 52-week high, while institutions own 74.66% of it.

Earnings increased by 136.41% this year, and 94.71% this quarter. 27 out of 35 analysts recommend buying, and four suggest outperform. The analysts are extremely bullish on the stock. However, the stock is trading at P/B ratio of 30.

Baidu can still be an outperformer. But if things go south, there is huge downside potential. It is a very risky stock to invest in.

ConocoPhillips

ConocoPhillips recently multiple-topped, and it has been one of Cramer’s fave plays for a long time. As of the Aug 29 close, ConocoPhillips was trading at a P/E ratio of 8.54, and a forward P/E ratio of 7.5. Analysts expect the company to have an annualized EPS growth of 8.0% in the next five years. Profit margin in 2010 was 5.1%, while it paid a 3.89% dividend.

The company returned 28.6% in the last twelve months, and it is trading 15.64% lower than its 52-week high. Target price is $83.37, indicating an about 23.0% increase potential. O-Metrix score is 7.41, whereas institutions own 73.18% of the stock. Yields are impressive. Earnings increased by 28.09% this year, while debt-to assets ratio is going down for the last five years.

P/B is 1.3, and P/S is 0.4, both of which are better than industry averages. Moreover, ConocoPhillips has a five-star rating from Morningstar. I would not ignore this stock.

Hain Celestial

Hain Celestial reported a 2-cent beat recently, increasing its revenue by 31.1% from the year-ago quarter. Here is what Cramer commented on Hain:

I think it could represent an excellent buying opportunity. Hain is still up 74 percent since I first got behind it in April of last year … I think it’s going to return to its positive long-term trajectory.

Hain shows a trailing P/E ratio of 28.7, and a forward P/E ratio of 20.9, as of Aug 29. Estimated annualized EPS growth for the next five years is 13.7%. With a profit margin of 4.6%, Hain has no dividend policy.

Earnings increased by 79.19% this quarter, and 79.08% this year. Target price implies a 12.9% upside movement potential, whereas it is trading 13.96% lower than its 52-week high. O-Metrix score of the company is 2.76, and it returned 45.9% in the last twelve months. Institutions own 88.59% of the stock, and sales rose by 31.08% this quarter.

On the other hand, Hain has a two-star rating from Morningstar. ROE is 6.2% and operating margin is 8.7%, both of which are way lower than industry averages. P/E- forward P/E ratios are way too high for me, and I would pick more profitable ones instead.

Source: Cramer's 4 Favorite Stock Picks In Recent Weeks