Seeking Alpha
Profile| Send Message|
( followers)  

Jim Cramer is one of the most respected and entertaining stock pickers on the Street. As I have expected, he made lots of stock calls again, trying to guide simple investors out of this uncertain environment. He made thirteen calls in his Sept. 13 Lightning Round program. Ten of them were bullish this time, and the rest were bearish. I have investigated all of these stocks from a fundamental perspective, adding my opinion about them. I have applied my O-Metrix Grading System where possible. Here is a fundamental analysis of these stocks from Cramer's Lightning Round:

Stock Name

Ticker

Cramer's Suggestion

O-Metrix Score

My Take

SXC Health Solutions

(SXCI)

Buy, but alternative is better

3.44

Avoid

Express Scripts

(NASDAQ:ESRX)

Buy

5.80

Buy

Transocean

(NYSE:RIG)

Avoid

N/A

Buy later

Schlumberger

(NYSE:SLB)

Buy

4.63

Buy

Halliburton

(NYSE:HAL)

Buy

7.22

Buy

Baker Hughes

(NYSE:BHI)

Buy

6.93

Buy

Clean Energy Fuels

(NASDAQ:CLNE)

Buy, but alternative is better

N/A

Avoid

Westport Innovations

(NASDAQ:WPRT)

Buy

N/A

Avoid

Bank of America

(NYSE:BAC)

Buy

N/A

Risky Buy

Ford Motor

(NYSE:F)

Avoid

5.82

Buy

Chesapeake

(NYSE:CHK)

Top Pick

3.60

Buy After Pullback

Infinera Corp.

(NASDAQ:INFN)

Avoid

N/A

Avoid

Juniper Networks

(NYSE:JNPR)

Buy

5.00

Buy

Data obtained from Finviz/Morningstar, and is current as of the Sep. 14 close.

Cramer likes SXC Health Solutions. However, he would rather go with Express Scripts when it comes to pharmacy benefit managers. Here is a brief comparison of these stocks:

Current as of Sep.14 close.

SXC Health

Express Scripts

P/E ratio

47.2

17.9

Forward P/E ratio

25.3

11.4

Estimated EPS growth for the next 5 years

25.0%

17.0%

Dividend yield

-

-

Profit margin

2.2%

2.9%

Gross margin

7.5%

6.8%

Upside movement potential

21.5%

47.1%

SXC Health is trading 18.99% lower than its 52-week high, while Express is trading 27.85% lower. O-Metrix scores of SXC Health and Express are 3.44 and 5.80, respectively. SXC returned 32.6% in the last twelve months, and Express returned -4.9%. I agree with Cramer. SXC Health is not a good buy compared to Express Scripts. Analysts also agree with me. Their mean target price imply almost 47.1% upside potential.

Although Cramer likes Transocean, he thinks that it comes with too much risk. He instead prefers Schlumberger, Halliburton, and Baker Hughes. Here is a brief comparison of these four stocks:

Current as of Sep.14 close.

Transocean

Schlumberger

Halliburton

Baker Hughes

P/E ratio

-135.1

20.0

15.3

19.2

Forward P/E ratio

9.6

13.2

8.8

9.7

Estimated EPS growth for the next 5 years

16.5%

14.0%

16.5%

19.0%

Dividend yield

5.59%

1.39%

0.91%

1.04%

Profit margin

0.4%

14.2%

11.4%

7.4%

Gross margin

39.6%

23.9%

19.1%

22.1%

Upside movement potential

36.0%

55.5%

76.4%

68.8%

Analysts are quite optimistic on Transocean. The forward P/E ratio is 9.6. The stock has a yield of 5.59%. However, I would wait until earnings confirm analysts' expectations. Schlumberger is also a good stock to own, but Halliburton and Baker Hughes seem to offer better value. Halliburton returned 25.8% in a year, while Baker Hughes returned 43.9%. Halliburton is currently trading 31.50% lower than its 52-week high, and Baker Hughes is trading 28.54% lower.

O-Metrix scores of Halliburton and Baker Hughes are 7.22 and 6.93, respectively. Both of their debt-to assets ratio are slightly going down for the last four quarters. I think Halliburton and Baker Hughes are both opportune buys. Schlumberger is a buy, as well. Cramer commented:

Clean Energy, I think, is fine. I wish it had that bill [Natural Gas Act]. They don't have that bill... that would help them. The one I like is Westport, up 3 today... let that come in. At a 52-week high, that has been a huge winner.

Here is a brief comparison between these two stocks:

Current as of Sep.14 close.

Clean Energy

Westport Innovations

P/E ratio

-263.2

-26.0

Forward P/E ratio

-75.2

-64.1

Estimated EPS growth for the next 5 years

27.5%

30.0%

Dividend yield

-

-

Profit margin

-1.3%

-31.3%

Gross margin

31.2%

37.9%

Upside movement potential

22.5%

-21.7%

Clean Energy is currently trading 25.38% lower than its 52-week high, while Westport is trading 6.04% higher. Clean Energy returned -8.2% in the last twelve months, whereas Westport returned 86.7%. Most of their indicators are completely terrible. Clean Energy’s debt-to assets ratio is climbing for the last five quarters. Neither of them are buy for me.

Although Bank of America has been a big loser, Cramer thinks that it is bottoming. It shows a trailing P/E ratio of -4.6, and a forward P/E ratio of 5.5, as of Sept. 14. Analysts estimate a 9.1% annual EPS growth for the next five years, which is Utopian given the -37.05% EPS growth of last five years. It paid a 0.57% dividend last year, while the profit margin (-18.5%) is crushed by the industry average of 6.5%.

Earnings decreased by 430.83% this quarter, and 28.55% this year. SMA20, SMA50, and SMA200 are -4.50%, -18.32% and -40.80%, respectively. Insiders own only 0.02% of the stock, while it is trading 54.22% lower than its 52-week high. Target price is $12.16, implying a 73.9% upside potential. Bank of America returned -48.9% in a year. Debts and assets are unstable. While ROE is -7.89%, ROI is -2.27%. ROA is -0.72%. I am not a big fan of Bank of America. Normally, I would stay away from it. However, after the Buffett deal, I have more confidence in the stock.

Cramer recommends avoiding Ford until the global economy turns around. The auto company was trading at a P/E ratio of 5.9, and a forward P/E ratio of 5.6, as of Sept. 14. Five-year annualized EPS growth forecast is 6.7%. It pays no dividend, while the profit margin is 5.2%.

The O-Metrix score of the company is 5.82, whereas earnings increased by 92.86% this year. Target price is $18.03, which indicates an about 75.3% upside movement potential. P/E ratio, P/S (0.3), and profit margin are moderate green flags. The stock is currently trading 45.84% lower than its 52-week high, whereas it returned -14.1% in a year. Debts are decreasing for the last five quarters. PEG value is 0.8. 14 out of 20 analysts recommend buying. Moreover, Ford has a five-star rating from Morningstar. Current price provides an opportune entry point. If Ford decides to disintegrate, the parts would probably be worth much more than its market cap of $38.64 billion.

Cramer said Tuesday:

Yeah, I like CHK [Chesapeake Energy] very much... it is a winner... it has tremendous assets. I think the stock is going to do quite well... it is moving to become more oil than natural gas... it is a winner, if you ask me.

Chesapeake shows a trailing P/E ratio of 19.4, and a forward P/E ratio of 10.6, as of Sept. 14. Estimated annual EPS growth for the next five years is 9.7%. Profit margin (10.1%) is slightly lower than the industry average of 10.4%, while it offered a 1.11% dividend last year.

Chesapeake had a 68.03% EPS growth this quarter, and 126.27% this year. Institutions hold 75.69% of the shares, while its O-Metrix score is 3.60. The debt-to assets ratio is going down since Q4 2010, whereas the stock returned 47.0% in the last twelve months. P/E ratio, P/S (2.3), ROE (7.9%), and debt-to equity ratio (0.8) are moderate green flags. It has a remarkable gross margin of 85.2%. Average analyst rating is 1.5 (1=Buy, 3=Sell). Insiders have been mostly buying stocks for a while. Wait for a pullback before buying.

Cramer recommends Juniper instead of Infinera. Juniper lost almost 42% since January. Here is a brief comparison between these two stocks:

Current as of Sep.14 close.

Juniper

Infinera

P/E ratio

20.5

-21.2

Forward P/E ratio

13.7

322.6

Estimated EPS growth for the next 5 years

17.1%

15.0%

Dividend yield

-

-

Profit margin

12.9%

-8.9%

Gross margin

66.2%

46.9%

Upside movement potential

38.4%

-11.1%

Juniper is trading 51.86% lower than its 52-week high, whereas Infinera is trading 34.69% lower. Juniper returned -25.8% in a year, while Infinera returned -24.6%. Infinera is highly volatile, and it recently multiple-bottomed. Juniper, on the other hand, has a 5.00 O-Metrix score. Juniper crushes Infinera with almost all of its indicators, and Cramer made a bulls-eye recommending this stock.

Source: 10 Buy And 3 Sell Ideas From Cramer's Lightning Round