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Jim Cramer, the Mad Money host, is one of the reputable and entertaining stock pickers of all times. While I have been writing about Cramer’s Lightning Round mentions for a while, I have also started to write about the Fast Money program. In the week’s last Lightning Round, Cramer talked about seven companies. Five of his comments were bullish this time, and one was bearish. I have examined all of his stock mentions from a fundamental perspective, and 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 Cramer's September 23 Lightning Round:

Stock Name

Ticker

Cramer's Suggestion

O-Metrix Score

My Take

Cliffs Natural

(CLF)

Buy Later

13.26

Buy

Caterpillar

(CAT)

Buy Later

6.23

Buy

Under Armour

(UA)

Buy

2.66

Avoid

Nordic American Tanker

(NAT)

Avoid

N/A

Avoid

Opko Health

(OPK)

No Calls

N/A

Avoid

Southern Copper

(SCCO)

Buy

13.47

Long-Term Buy

Linn Energy

(LINE)

Buy

N/A

Avoid

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

Cliffs Natural and Caterpillar “trade together,” Cramer said, and he prefers waiting until they go at least 5% to 10% down before buying. Here is a brief comparison between these two stocks:

Current as of September 23 close.

Cliffs Natural

Caterpillar

P/E ratio

5.2

12.2

Forward P/E ratio

3.8

8.3

Estimated EPS growth for the next 5 years

10.0%

10.3%

Dividend yield

1.94%

2.49%

Profit margin

26.3%

7.8%

Gross margin

39.7%

28.7%

Upside movement potential

111.9%

56.6%

Cliffs Natural is currently trading 43.25% lower than its 52-week high, while Caterpillar is trading 36.36% lower. O-Metrix scores of Cliffs Natural and Caterpillar are 13.26 and 6.23, respectively. Cliffs Natural returned -7.6% in the last twelve months, whereas Caterpillar returned -7.4%. I think both stocks are among the cheapest in the market. Cliffs Natural is a great buy. Caterpillar is also a cheap buy, as well.

Cramer believes that it is time to “pull the trigger” for Under Armour. The company shows a trailing P/E ratio of 49.5, and a forward P/E ratio of 31.2, as of September 23. Analysts estimate a 21.5% annual EPS growth for the next five years. It has no dividend policy, while the profit margin (6.2%) is slightly better than the industry average of 5.0%.

Target price indicates a 5.2% upside movement potential, whereas it is trading 12.39% lower than its 52-week high. O-Metrix score is 2.66. Under Armour returned 61.7% in a year, and PEG value is 1.4. P/E ratio, P/B (7.0), and P/S (3.1) are hopeless red flags. Cash flow is decreasing, while debt-to-assets ratio is unstable. Insiders have been mostly selling stocks for some time. Moreover, it has a one-star rating from Morningstar. I do not see any reason to buy this stock.

Cramer is bearish on tanker stocks, including Nordic American Tanker. The Bermuda-based company has a P/E ratio of -20.9, and a forward P/E ratio of -82.6, as of the Friday close. Although profit margin (-36.9%) is terrible, dividend yield (7.65%) is outstanding.

Earnings decreased by 173.05% this quarter, and 169.46% this year. Target price implies a 17.3% upside potential, whereas it is trading 40.14% lower than its 52-week high. SMA50 and SMA200 are -14.40% and -29.43%, respectively. While ROA is -3.03%, ROE is -3.52%. ROI is -3.07%. Nordic American returned -41.0% in a year. P/S (7.7), operating margin (-35.4%), profit margin and ROE are crushed by their industry averages. Analysts give a 2.1 rating for Nordic Tanker (1=Buy, 3=Sell). I like tanker companies, and I think they will be outperformers. However, I agree with Cramer on this bearish call.

Cramer asked for time to do some homework on Opko Health before making a call. The healthcare company, as of the September 23 close, was trading at a P/E ratio of -59.5. Profit margin (-54.7%) is crushed by the industry average of 13.4%, while it pays no dividend.

The debt-to assets ratio is extremely unstable, and cash flow is struggling. Target price indicates a 39.9% upside movement potential, whereas it is trading 12.72% lower than its 52-week high. Operating margin is -44.4%. ROA, ROE, and ROI are -19.29%, -27.34% and -24.23%, respectively. P/B is 11.4, and P/S is 28.8, both of which are way above their industry averages. Moreover, the stock is highly volatile. I would stay away from it.

"I want you to buy some Southern Copper. I think that yield is safe," Cramer commented. Southern Copper shows a trailing P/E ratio of 11.2, and a forward P/E ratio of 7.7, as of September 23. Five-year annual EPS growth forecast is 16.0%. With a profit margin of 32.4%, and a dividend of 9.47%, Southern Copper is a magnificent stock for dividend lovers.

O-Metrix score of the company is 13.47, while it returned -24.5% in the last twelve months. Southern Copper had a 110.24% this quarter, and 67.35% this year. Target price is $40.07, which implies a 52.9% upside potential. The stock is trading 45.39% lower than its 52-week high. Operating margin is 52.2%. ROA, ROE, and ROI are 26.16%, 50.95% and 29.89%, respectively. PEG value is 0.5. Copper has gone south, dragging Southern Copper along. However, Southern Copper is a highly profitable company, which is likely to outperform in the future.

Although oil and gas are in a downward trend, Cramer likes Linn Energy anyway. The Texas-based Linn has a P/E ratio of -12.8, and a forward P/E ratio of 15.5, as of September 22. Analysts expect the company to have a 5.0% annualized EPS growth for the next five years. It pays a gorgeous dividend of 7.58%, while the profit margin (-71.2%) is horrible.

Target price is $44.55, indicating a 22.2% upside movement potential. The stock is trading 9.84% lower than its 52-week high, whereas it returned 19.7% in the last twelve months. The debt-to-assets ratio is climbing up for the last three years. While SMA20 is -2.24%, SMA50 is -3.07%. ROA and ROE are -7.39% and -15.45%, respectively. Operating margin is -13.5%, while PEG value is 3.1. P/B (2.2), P/S (9.1), operating margin, profit margin, and ROE are strong red flags. There are much better energy companies. Under these circumstances, I wouldn’t put my money in Linn Energy.


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

Source: Jim Cramer's Latest Buy And Sell Ideas