Here are the last five stock mentions from Jim Cramer’s Lightning Round on September 26, along with my opinions about them. The O-Metrix Grading System is applied where possible.
Stock Name | Ticker | Cramer's Suggestion | O-Metrix Score | My Take |
Citigroup Inc. | (C) | Sell | 7.44 | Risky Buy |
Brasil Foods | (BRFS) | No Calls | 0.40 | Avoid |
Carbo Ceramics | (CRR) | Buy After Pullback | 7.95 | Risky Buy |
Core Labs | (CLB) | Buy After Pullback | 4.51 | Risky Buy |
Exelon Corp. | (EXC) | Buy | 2.67 | Long-Term Buy |
Data from finviz/morningstar and is current as of Sept. 26 close. Download O-Metrix calculator here.
Cramer does not like Citigroup:
If you can get two days of strength, you have to sell it. ... There are so few bank stocks I believe in. These go down with Europe and don't go up with anything.
The New-York based bank shows a trailing P/E ratio of 7.5 and a forward P/E ratio of 5.2 as of September 26. Analysts estimate a 9.3% annual EPS growth for the next five years, which sounds irrational given the -37.85% EPS growth of past 5 years. With a profit margin of 12.3%, it pays a razor-thin dividend of 0.15%.
The O-Metrix score for Citigroup is 7.44, while it returned -31.0% in the last twelve months. SMA50 and SMA200 are -14.57% and -35.30%, respectively. Insiders hold only 0.01% of the stock. Target price implies a 77.8% upside movement potential, whereas it is currently trading 48.09% lower than its 52-week high. While ROA is 0.50%, ROE is 5.94%. ROI is 1.56%. Citigroup is extremely volatile with a Beta value of 2.57. I wouldn’t put my money in a stock with these indicators, but if you believe in recovery, this may be your stock.
Cramer asked for time to do some research on Brasil Foods before making a call. The company was trading at a P/E ratio of 19.3 and a forward P/E ratio of 13.1 as of September 26. Estimated annual EPS growth for the next five years is 1.3%. It has no dividend policy, while the profit margin (5.4%) is slightly better than the industry average of 3.7%.
Target price is $18.22, indicating about a 3.0% upside potential. The stock is currently trading 16.44% lower than its 52-week high, whereas it has an O-Metrix score of 0.40. Brasil Foods returned 19.9% in the last twelve months, and PEG value is 10.3. The debt-to-assets ratio is extremely unstable, while cash flow is not doing well. Gross margin and operating margin are 22.3% and 7.5%, respectively. SMA50 is -6.99%, while SMA200 is -2.24%. P/E ratio, P/B (2.0), and P/S (1.1) are alarming red flags. While ROA is 7.44%, ROE is 10.56%. ROI is 8.91%. 6 out of 13 analysts recommend holding. This stock is too risky, so stay away.
Cramer likes Core Labs more than Carbo:
Carbo is a good company, but I have to like Core Labs more ... but up $3, I'm not going to pull the trigger on a stock up that much ... let it come in.
Here is a brief comparison of these two stocks:
Current as of September 26 close. | Carbo | Core Labs |
P/E ratio | 27.0 | 29.2 |
Forward P/E ratio | 15.8 | 20.5 |
Estimated EPS growth for the next 5 years | 33.3% | 21.05% |
Dividend yield | 0.75% | 1.40% |
Profit margin | 18.8% | 19.7% |
Gross margin | 39.9% | 34.7% |
Upside movement potential | 44.2% | 16.5% |
Carbo is trading 27.76% lower than its 52-week high, while Core Labs is trading 12.07% lower. O-Metrix scores of Carbo and Core Labs are 7.95 and 4.51, respectively. Carbo returned 62.8% in the last twelve months, whereas Core Labs returned 19.8%. Both of their EPS growth estimates sound irrational with these indicators, especially that of Carbo. Core seems a more reasonable buy. Buy at your risk.
Exelon returned 0.2% in a year, and Cramer is bullish on this stock. The Illinois-based company has a P/E ratio of 10.6, and a forward P/E ratio of 14.2, as of the September 26 close. Analysts expect the company to have a 1.7% annualized EPS growth in the next five years, which sounds conservative given the 22.41% EPS growth of last five years. With a profit margin of 13.7%, and a dividend of 4.94%, Exelon is a charming stock for dividend lovers.
The O-Metrix score for Exelon is 2.67, which, I believe, should be higher as EPS growth estimate sounds truly conservative. Target price is $46.32, implying a 7.5% increase potential. The stock is trading only 3.58% lower than its 52-week high, whereas ınstitutions own 0.05% of the shares. Debts and assets are unstable, while cash flow is terrible. PEG value is 8.2.
On the other hand, earnings increased by 38.90% this quarter. Gross margin is 61.1%, and ROE is 19.47%. SMA20, SMA50, and SMA200 are 0.61%, 1.30% and 4.59%, respectively. Moreover, it has a four-star rating from Morningstar. Exelon should outperform in the future, as the demand for low-cost electricity reaches vital rates.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
