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The market's most joyful stock picker, Jim Cramer, was on a vacation for some time. He returned with powerful stocks like Skyworks Solutions (SWKS), General Motors (GM), and Philip Morris (PM). I have investigated all of his Lightning Round stock mentions 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

Skyworks Solutions

SWKS

Buy After Sector Pullback

5.70

Buy After Sector Pullback

Sandridge Energy

SD

Avoid

0.71

Avoid

General Motors

GM

Avoid

14.14

Buy

Caribou Coffee

CBOU

Buy, but alternative is better

7.59

Buy

Starbucks

SBUX

Buy

4.10

Buy, but alternative is better

Vector Group

VGR

Avoid

N/A

Avoid

Philip Morris

PM

Buy

5.02

Long Term Buy

Seadrill Limited

SDRL

-

9.98

Top Pick

El Paso Pipeline

EPB

Buy

5.88

Buy After Pullback

Although Cramer is bullish on Skyworks (SWKS), he recommends waiting for the tech sector to bottom before buying. As of Sep 6, Skyworks was trading at a P/E ratio of 17.5, and a forward P/E ratio of 9.3. Analysts expect the company to have a 15.3% annual EPS growth in the next five years, which is conservative given the 36.04% EPS growth of past 5 years. It has no dividend policy, while the profit margin was 15.7% last year.

Sales increased by 29.31% this quarter. The company returned 4.0% in a year, while it has an O-Metrix score of 5.70. Skyworks had an EPS growth of 34.21% this year, and 42.59% this quarter. Target price indicates a 66.4% upside potential, and the stock is trading 48.97% lower than its 52-week high. Institutions own 84.80% of the stock. Debts have landed within the last five years. Operating margin is 21.3%, and debt-to equity ratio is 0.0, both of which are trustworthy green flags. PEG value is 0.6. Moreover, the company has a four-star rating from Morningstar. The stock is already way lower than its fair value, but it will be a terrific buy after the tech dip.

Cramer says that Sandridge (SD) has “been a dog,” and he wants the CEO to come on the show to explain what happened. The company shows a trailing P/E ratio of 156.3, and a forward P/E ratio of 17.4, as of the September 6 close. Estimated annualized EPS growth for the next five years is 12.5%, which is reasonable when its 10.72% EPS growth of past five years is considered. With a profit margin of -2.5%, Sandridge pays no dividend yield.

Debts nearly tripled since 2007, outrunning assets percentage with a landslide. Target price implies a 89.4% increase potential, while the stock is currently trading 49.03% lower than its 52-week high. O-Metrix score is 0.71, and it returned 57.0% in the last twelve months. Debt-to equity ratio is 2.0, crushed by the industry average of 0.9. Earnings decreased by 987.45% this quarter. ROA, ROE, and ROI are -0.70%- -4.67% and -0.87%, respectively. Operating margin is -11.8%. While SMA50 is -27.66%, SMA200 is -27.68%. EPS growth estimation (500.00%) for the next year is looks unattainable under these circumstances. I would never think of investing any money in Sandridge for now.

"I was a little stunned...the sales in China are slowing down big...the kicker of the General Motors story was China, and I see that China is being hit with stagflation." Cramer comments.

As of the September 6 close, the Michigan-based General Motors (GM) has a P/E ratio of 3.6, and a forward P/E ratio of 4.6. Five-year annual EPS growth forecast is 11.60%. Profit margin (5.4%) is slightly better than the industry average of 4.1%, and it has no dividend policy.

Its O-Metrix score is 14.14, while it is trading 45.69% lower than its 52-week high. Target price indicates a 89.9% upside potential, whereas it returned -37.3% since since Nov 2010. ROE is 29.2%, and debt-to equity ratio is 0.3, both of which are way better than their industry averages. Earnings increased by 80.74% this year, and institutional transactions have increased by 24.76% in the last three years. Moreover, it has a five-star rating from Morningstar. I would not ignore General Motors. Auto companies have been traditionally priced with single digit P/E ratios, but GM stock looks like ready for a bounce.

While Cramer likes Caribou (CBOU), he prefers Starbucks (SBUX) instead. Here is a brief comparison between these two stocks:

Current as of Sep.6 close.

Caribou

Starbucks

P/E ratio

8.5

24.9

Forward P/E ratio

21.4

20.6

Estimated EPS growth for the next 5 years

22.7%

17.3%

Dividend yield

-

1.38%

Profit margin

11.5%

10.1%

Gross margin

19.7%

58.3%

Upside movement potential

30.8%

18.1%

Caribou is trading 18.74% lower than its 52-week high, while Starbucks is trading 7.86% lower. Caribou returned 45.1% in a year, whereas Starbucks returned 51.7%. O-Metrix scores of Caribou and Starbucks are 7.59 and 4.10, respectively. Caribou has zero debts for the last five years, whereas Starbucks has its debt-to assets ratio around 10%. Analysts give a 1.1 rating for Caribou, and a 1.5 rating for Starbucks (1=Buy, 3=Sell). I think Caribou is a better buy.

Cramer recommends Philip Morris (PM) instead of Vector Group (VGR). Here is a brief comparison between these two stocks:

Current as of Sep.6 close.

Vector Group

Philip Morris

P/E ratio

19.3

15.5

Forward P/E ratio

-

12.9

Estimated EPS growth for the next 5 years

11.0%

10.5%

Dividend yield

8.49%

3.78%

Profit margin

6.5%

27.5%

Gross margin

19.9%

65.4%

Upside movement potential

13.6%

12.0%

Vector Group is trading 1.20% lower than its 52-week high, and Philip Morris is trading 6.78% lower. Vector Group returned -0.7% in a year, while Philip Morris returned 27.7%. Vector Group’s debt-to assets ratio is hovering around 55%, whereas that of Philip Morris is strolling around 45%. Operating margin (11.4%), debt-to equity ratio (33.4) and profit margin are alarming red flags for Vector Group. On the other hand, ROE (204.3%) and debt-to equity ratio (3.6) are strong green flags for Philip Morris. Moreover, Philip Morris has a 5.02 O-Metrix score. I would not keep Vector Group just for its dividend, as I think Vector's dividend yield is not sustainable in the long-term.

Cramer asked for some time to do some research on Seadrill (SDRL) before making a call. The Bermuda-based offshore driller, as of September 5, shows a trailing P/E ratio of 8.3, and a forward P/E ratio of 9.1. Analysts estimate a 10.20% annual EPS growth for the next five years. Profit margin (40.4%) nearly triples the industry average of 13.3%, while Seadrill offers a gorgeous dividend of 7.17%.

The O-Metrix score of the company is 9.98, and target price indicates an about 28.0% upside potential. The Debt-to assets ratio is hovering around 55%s. Seadrill is currently trading 18.78% lower than its 52-week high, while it returned 22.8% in the last twelve months. Earnings increased by 94.60% this quarter. Operating margin (40.4%), profit margin, ROE (34.4%), and debt-to equity ratio (1.6) are tremendous green flags. Moreover, it has a four-star rating from Morningstar. This is a stock worth adding to your retirement portfolio.

"That (El Paso Pipeline) is a terrific stock with a 5% yield. I like it." Cramer said.

El Paso (EPB) was trading at a P/E ratio of 14.4, and a forward P/E ratio of 15.0, as of September 6. Estimated annual EPS growth for the next 5 years is 12.0%. Profit margin (28.9%) crushes the industry average of 4.1%, while shareholders enjoyed a 5.31% dividend in 2010.

Insiders own 50.04% of the stock, while it has an O-Metrix score of 5.88. Target price implies a 16.3% increase potential, and it is trading 2.30% lower than its 52-week high. Debt-to equity ratio is 2.0, way better than the industry average of 3.5. Gross margin and operating margin are 100.0% and 54.9%, respectively. SMA50 is 3.24%, and SMA200 is 5.68%. The stock returned 13.9% in a year. El Paso is a dividend pick for the next five years. Consider the stock after a pullback.

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

Source: 4 Buy and 3 Sell Ideas By Cramer