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Jim Cramer is one of the most entertaining stock pickers on the Street, and it is really helpful taking stock suggestions from him. However, it is always important to do your own research before making a move. He has been making tons of stock calls for a while, and on his October 6 Lightning Round, Cramer made 11 calls. Six of them were bullish this time, four were bearish, and one neutral. I had to divide my article into two parts in order to analyze all of them. 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 applicable, as well. Here is a fundamental analysis of the first six stocks from Cramer's October 6 Lightning Round:

Stock Name

Ticker

Cramer's Suggestion

O-Metrix Score

My Take

Buffalo Wild Wings

(BWLD)

Buy

4.65

Buy

Cliffs Natural

(CLF)

Avoid

23.62

Buy

American Capital Agency

(AGNC)

Buy, But Alternative is Better

N/A

Buy

Annaly Capital

(NLY)

Buy

N/A

Buy

PepsiCo

(PEP)

Buy

3.90

Alternative is Better

KKR Financial

(KKR)

Buy

13.00

Long-Term Buy

(Data obtained from Finviz/Morningstar, and is current as of October 6 close. You can download the O-Metrix calculator here.)

Cramer likes Buffalo Wild Wings, as its story is “intact,” and it has “good growth.” As of October 6, it has a P/E ratio of 24.3, and a forward P/E ratio of 18.2. Five-year annual EPS growth forecast is 19.8%. Profit margin (6.5%) is below the industry average of 10.5%, while it pays no dividend.

Target price is $73.86, which implies a 26.1% upside potential. The stock is trading 15.64% lower than its 52-week high, whereas it returned 19.1% in a year. O-Metrix score is 4.65. The debt-to-assets ratio is hovering around 5% for the last five years, and cash flow seems all right. Earnings increased by 15.38% this quarter, and 24.56% this year. Institutions hold 81.61% of the shares. Debt-to-equity ratio is 0.0, which crushes the industry average of 3.8. PEG value is 0.9, whereas Beta value is 0.91. Sales rose by 26.36% this quarter. This stock is worth buying.

Cramer doesn’t like Cliffs Natural, as the “whole group has been killed.” It was trading at a reputable P/E ratio of 5.3, and a forward P/E ratio of 3.8, as of October 6. Analysts expect the company to have a 19.6% annualized EPS growth in the next five years. It pays a 1.90% dividend, while the profit margin (26.3%) crushes the industry average of 5.1%.

The stock is currently trading 42.22% lower than its 52-week high, whereas it returned -11.3% in the last twelve months. O-Metrix score is 23.62, and its target price indicates a 107.1% increase potential. Cliffs Natural had a 52.30% EPS growth this quarter, and 359.33% this year. Institutions own 87.03% of the shares. Yields are great, and it has a four-star rating from Morningstar. Operating margin is 33.8%. ROA, ROE, and ROI are 15.67%, 35.41% and 22.76%, respectively. 12 out of 17 analysts covering the company recommends buying, and my opinion is no different.

American Capital: When it comes to REITs, Cramer prefers Annaly Capital. Here is a brief comparison between these two stocks:

Current as of October 6 close.

American Capital

Annaly Capital

Market capital

$5.0 billion

$15.9 billion

P/E ratio

4.1

6.0

Current price

$27.04

$16.06

52-week range

$22.03-$30.76

$14.05-$18.79

Dividend Yield

20.71%

14.94%

American Capital reported a total revenue of $264.73 million in Q2 2011, which had a $50.59 million total revenue in Q2 2010. Annaly Capital, on the other hand, reported a total revenue of $957.07 million in Q2 of this year, which had a $643.68 million revenue in the year-ago quarter. American Capital is paying quarterly dividends since 2008, whereas Annaly is paying since 1997. American Capital is trading 6.36% lower than its 52-week high, and Annaly is trading 10.47% lower. American Capital has a price-to-book value of 1.0, while that of Annaly is 1.1. Both of them are profitable buys for me.

Of PepsiCo, Cramer remarked, "Short term, there have been negative comments, but with that 3% yield and costs coming down, I want to own it."

Pepsi shows a trailing P/E ratio of 15.4, and a forward P/E ratio of 12.5, as of October 6. Estimated annualized EPS growth for the next five years is 7.5%. Profit margin (10.1%) is way below the industry average of 15.9%, while it pays a 3.40% dividend.

O-Metrix score is 3.90, whereas it is currently trading 14.45% lower than its 52-week high. Target price is $74.77, implying a 23.4% upside movement potential. Pepsi returned -8.4% in a year. The debt-to-assets ratio is sharply increasing for the last five years, and insiders own only 0.07% of the stock. SMA20, SMA50, and SMA200 are -1.00%, -2.68% and -6.65%, respectively. Operating margin is 15.2%, while ROA is 8.97%. PEG value is 1.7.

Coca-Cola is a screaming buy when compared to Pepsi, with a P/E ratio of 12.2, and a forward P/E ratio of 15.3, as of the October 6 close. Five-year annualized EPS growth forecast is 8.0%. With a profit margin of 29.7%, shareholders enjoyed a 2.88% dividend last year. O-Metrix score is 3.95, and Coca-Cola returned 10.0% in a year. Moreover, it has a 19.0% upside potential. Analysts give a 2.40 recommendation for Pepsi, and 1.80 for Coca-Cola (1=Buy, 5=Sell). (Full analysis of Coca-Cola here.)

Cramer recommends home gamers buying KKR Financial, as it is cheap and has a 4.3% dividend that seems to be “intact.” The New York-based financial has a P/E ratio of 5.8, and a forward P/E ratio of 5.2, as of October 6. Analysts estimate a 10.0% annualized EPS growth for the next five years. Profit margin (65.7%) crushes the industry average of 18.5%, while it pays a 4.30% dividend.

Target price is $18.00, indicating a 69.9% increase potential. The stock is trading 43.48% lower than its 52-week high, whereas it returned 0.1% in a year. O-Metrix score is 13.00. Earnings increased by 23.27% this quarter, and institutions own 67.65% of the shares. Debts are going down for the last three years, while assets are sharply increasing. ROE is 25.50%, and PEG value is 0.5. This stock will outperform in the long run.

Source: Cramer's Lightning Round Buys And Sells, Part I