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I have been writing about Jim Cramer’s Lightning Round segment for a while. In Cramer’s Mad Money program, he recently gave names of five stocks that can save your earnings throughout this storm. I have examined all of his stock mentions from a fundamental perspective and have added my opinion about them. I have applied my O-Metrix Grading System where possible, as well. Here is a fundamental analysis of these stocks from recent Mad Money shows:

Stock Name

Ticker

Cramer's Suggestion

O-Metrix Score

My Take

General Mills (NYSE:GIS)

Risky Buy

4.00

Buy After Pullback

Kraft

(KFT)

Risky Buy

3.50

Hold

HHGregg

(HGG)

Buy, but alternative is better

8.87

Long-Term Buy

Best Buy

(BBY)

Buy, but alternative is better

8.93

Long-Term Buy

Costco

(COST)

Buy

2.90

Hold

FedEx

(FDX)

Buy

6.82

Long-Term Buy

(Data from Finviz/Morningstar and is current as of September 23 close. You can download O-Metrix calculator, here.)

While General Mills (GIS) is a safety stock, Cramer believes that it has a limited upside potential. General Mills shows a trailing P/E ratio of 14.6, and a forward P/E ratio of 13.6, as of September 23. Analysts expect the company to have an 8.2% annual EPS growth in the next five years. Profit margin (12.1%) is far better than the industry average of 6.8%, while it paid a 3.09% dividend last year.

O-Metrix score of the company is 4.00, whereas it is trading only 2.46% lower than its 52-week high. Earnings increased by 56.86% this quarter, and 20.77% this year. General Mills returned 7.6% in a year, while debts are far from being a threat. Yields seem all right. Target price is $41.06, which implies a 5.7% upside movement potential. ROA and ROI are 29.80% and 12.87%, respectively. Operating margin (18.7%), profit margin, and ROE are strong green flags. Consider adding this stock to your portfolio after a pullback. General Mills is a recession-proof stock picked by Cramer.

Kraft (KFT) is a “bad company that is becoming good, especially since it is splitting up,” Cramer said. Although this is a risky investment, Cramer would buy it.

The Illinois-based Kraft, as of the September 23 close, was trading at a P/E ratio of 19.3, and a forward P/E ratio of 13.3. Estimated annualized EPS growth for the next five years is 8.0%. It pays a 3.44% dividend, while the profit margin (5.9%) is slightly better than the industry average of 6.8%.

Target price is $39.12, indicating an about 16.4% increase potential. The stock is trading 7.52% lower than its 52-week high, while it has an O-Metrix score of 3.50. Institutions own 75.57% of the shares. P/B (1.5) and debt-to equity ratio (0.6) are moderate green flags. Kraft Foods returned 7.6% in a year, and yields look good.

On the other hand, insiders hold only 0.11% of the stock. SMA20 and SMA50 are -2.64% and -2.62%, respectively. PEG value is 1.7. While ROA is 3.22%, ROE is 8.49%. ROI is 4.65%. Earnings decreased by 23.87% this year. The debt-to assets ratio is unstable, as well as cash flow. Insiders have been mostly exercising options for a while. Kraft is a risky investment. However, holding it is all right.

Cramer stated that while HHGregg (NYSE:HGG) is better than Best Buy (NYSE:BBY), he would rather go with Costco (NASDAQ:COST). Here is a brief comparison between these three stocks:

Current as of September 23 close.

HHGregg (HGG)

Best Buy (BBY)

Costco (COST)

P/E ratio

9.3

7.9

26.0

Forward P/E ratio

7.6

6.7

22.0

Estimated EPS growth for the next 5 years

15.0%

10.4%

12.8%

Dividend yield

-

2.64%

1.15%

Profit margin

2.2%

2.5%

1.7%

Gross margin

30.3%

25.0%

12.7%

Upside movement potential

42.6%

28.7%

-1.6%

I would eliminate Costco at first, as it is the poorest in terms of O-Metrix score, P/E- forward P/E ratios, profit margin, gross margin and upside movement potential. HHGregg is currently trading 61.26% lower than its 52-week high, while Best Buy is trading 46.50% lower. HHGregg returned 56.7% in the last twelve months, whereas Best Buy returned -37.3%. Both of their debts are far from being a threat. Both of them are currently trading at low P/E ratios, and I expect both stocks to outperform in the future. Holding Costco is OK, as well.

Cramer likes FedEx (NYSE:FDX) as a contrarian play, especially after a “slew of downgrades.” The Tennessee-based FedEx has a P/E ratio of 14.6, and a forward P/E ratio of 8.8, as of the Friday close. Five-year annual EPS growth forecast is 15.2%, which sounds overdone, given the -4.74% EPS growth of past 5 years. It pays a thin dividend of 0.78%, while the profit margin (3.7%) is slightly lower than the industry average of 5.4%.

O-Metrix score of FedEx is 6.82, whereas it is currently trading 31.83% lower than its 52-week high. Target price is $106.25, indicating an about 58.3% upside movement potential. Earnings increased by 32.73% this quarter, and 21.43% this year. FedEx returned -18.9% in the last twelve months. Yield seems all right, and debt-to assets ratio is going down since 2009. Debt-to equity ratio is 0.1, far better than the industry average of 0.8. Gross margin is 70.0%. PEG value is 0.6, whereas analysts give a 1.3 rating for the stock (1=Buy, 3=Sell). Moreover, FedEx has a five-star rating from Morningstar. If analyst estimates hold, this stock will be an outperformer in the long-term.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Cramer's Latest Shopping List: 6 Buy Ideas