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Similar to the recovery a year after Lehman disaster, the U.S. stocks are showing a creditable performance this quarter. It is time to regain losses from Q3, but you have to play on the right stocks. Therefore, Jim Cramer is trying to help you shape your portfolio. In October 12’s Lightning Round program, he made nine calls. Five of them were bullish, and the other four 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 and my FED+ fair value range system where applicable, as well. Here is a fundamental analysis of these stocks from Cramer's October 12 Lightning Round:

Stock Name

Ticker

Cramer's Suggestion

O-Metrix Score

My Take

AT & T

(NYSE:T)

Buy

5.13

Top Pick

InterDigital

(NASDAQ:IDCC)

Avoid

4.00

Hold

Chevron

(NYSE:CVX)

Buy

4.94

Top Pick

Molycorp

(NYSE:MCP)

Avoid

4.05

Hold

Freeport-McMoran

(NYSE:FCX)

Buy

7.65

Buy

Piedmont Office

(NYSE:PDM)

Avoid

N/A

Alternative is Better

Annaly Capital

(NYSE:NLY)

Buy

N/A

Buy

Cisco

(NASDAQ:CSCO)

Buy

4.51

Buy

Manitowoc

(NYSE:MTW)

Avoid

N/A

Avoid

(Data obtained from Finviz/Morningstar, and is current as of October 14 close. You can download the O-Metrix calculator here.)

Cramer is bullish on AT& T (T), whether it buys T-Mobile or not. It has a P/E ratio of 8.8, and a forward P/E ratio of 11.4, as of October 14. Five-year annual EPS growth forecast is 4.4%. With a profit margin of 16.2%, and a dividend of 5.90%, AT&T is an enjoyable stock for dividend lovers.

The telco is trading 6.57% lower than its 52-week high, while its target price implies a 13.3% upside potential. O-Metrix score is 5.13, and it returned 1.9% in a year. Yields seem all right, whereas debts are decreasing, since 2008. Debt-to equity ratio is 0.5, far below the industry average of 3.1. Beta value is 0.62. While gross margin is 56.9%, ROE is 18.82%. Earnings increased by 57.08% this year. AT&T is a great long-term play. I also do not care much about the T-Mobile acquisition. AT&T has been one of the safest stocks in my portfolio. (Full analysis, here).

While Cramer liked InterDigital (IDCC) before, it got inflated and he’s “not looking back.” It shows a trailing P/E ratio of 20.2, and a forward P/E ratio of 19.3, as of the Friday close. Estimated annual EPS growth is 15.0% for the next five years. Profit margin (32.9%) crushes the industry average of 9.2%, while it offers a thin dividend of 0.81%.

O-Metrix score is 4.00, whereas the stock is trading 40.37% lower than its 52-week high. Target price indicates a 35.9% increase potential, and it returned 64.1% in a year. Earnings decreased by 52.15% this quarter, while PEG value is 1.3. P/B is 5.2, and P/S is 6.6, both of which are alarming red flags. In just one quarter, the debt-to assets ratio has come from 0% to 20%. Cash flow is struggling, whereas insiders hold 1.06% of the shares. SMA50 and SMA200 are -20.00% and -2.64%, respectively. Holding would do OK.

Chevron (CVX) is a winner. It wasn't as disappointing as some people will tell you.

The oil company, as of October 14, was trading at a P/E ratio of 8.8, and a forward P/E ratio of 7.6. Analysts estimate a 5.0% annualized EPS growth for the next five years. It pays a 3.11% dividend, while the profit margin is 9.9%.

Earnings increased by 80.93% this year, and 42.73% this quarter. Target price indicates an about 15.2% upside movement potential, whereas the stock is trading 7.72% lower than its 52-week high. O-Metrix score is 4.94, and it returned 18.9% in the last twelve months. Yields seem all right, whereas debts are far from being a threat. Beta value is 0.78. ROE and ROI are 21.38% and 19.40%, respectively. Moreover, it has a four-star rating from Morningstar. Chevron is a screaming buy. Read a full analysis of Chevron here.

Cramer is bearish on rare earth stocks right now, including Molycorp (MCP). It shows a trailing P/E ratio of 113.6, and a forward P/E ratio of 9.8, as of Friday’s close. Analysts expect Molycorp to boost its annual earnings by 50.0% in the next five years. Profit margin (17.6%) is way lower than the industry average of 34.1%, while it pays no dividend.

Molycorp returned 26.2% in a year, whereas it has an O-Metrix score of 4.05. Target price implies a 118.9% increase potential, and it is trading 50.62% lower than its 52-week high. Insiders hold 1.73% of the shares, while insider transactions have decreased by 94.48% in the last six months. ROE is 4.44%, and ROE is 6.30%. SMA50 and SMA200 are -17.05% and -27.88%, respectively. P/E ratio, P/B (3.8), P/S (19.1), operating margin (13.8%), profit margin, and ROE are strong red flags. Hold if you own it, but do not buy.

Cramer believes that copper is “ready to roll again,” and recommends buying Freeport-McMoRan (FCX). The Arizona-based Freeport has a P/E ratio of 6.3, and a forward P/E ratio of 6.4, as of October 14. Five-year annualized EPS growth forecast is 7.0%. With a profit margin of 25.1%, it offers a 2.72% dividend.

Earnings increased by 55.90% this year, and 103.87% this quarter. Target price indicates a 53.0% increase potential, whereas it is currently trading 39.07% lower than its 52-week high. Freeport returned -23.7% in a year. O-Metrix score is 7.65, while debt-to assets ratio is falling since 2008. Operating margin is 50.7%. ROA, ROE, and ROI are 19.78%, 44.68% and 31.45%, respectively. Institutions hold 77.08% of the shares, while average analyst recommendation is 1.3 (1=Buy, 3=Sell). PEG value is 0.9, and sales rose by 50.47% this quarter. Freeport is a profitable buy.

Cramer would rather go with Annaly Capital (NLY) instead of Piedmont Office. (PDM). Here is a brief comparison between these two stocks:

Current as of October 14 close.

Piedmont Office

Annaly Capital

Market capital

$2.9 billion

$15.9 billion

P/E ratio

23.4

6.1

Current price

$16.70

$16.12

52-week range

$14.91-$21.32

$14.05-$18.79

Dividend Yield

7.54%

14.89%

Piedmont reported a total revenue of $150.54 million in Q2 2011, which had a $144.27 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. Piedmont is paying quarterly dividends since 2010, whereas Annaly is paying since 1997. Piedmont is trading 20.36% lower than its 52-week high, and Annaly is trading 10.13% lower. Piedmont has a price-to-book value of 1.0, while that of Annaly is 1.1. While operation twist might squeeze the mREITs profits, it might take a long time to its effects. I like Annaly, since it has been one of the best performers in the market, offering excellent yields.

Cramer believes that Cisco (CSCO) will “get back to $20,” as it has “gotten some mojo back.” It was trading at a P/E ratio of 15.0, and a forward P/E ratio of 9.3, as of October 14. Analysts expect the company to have an annual EPS growth of 9.6% in the next five years. Profit margin (15.0%) is way above the industry average of 9.5%, and shareholders enjoyed a 1.37% dividend last year.

Target price is $20.34, implying an about 15.8% upside movement potential. Cisco is currently trading 27.86% lower than its 52-week high, whereas it returned -24.7% in the last twelve months. O-Metrix score is 4.51, and PEG value is 1.0. SMA20 and SMA50 are 8.32% and 11.51%, respectively. Debts are far from being a threat. Gross margin and operating margin are 61.4% and 17.8%, respectively. Moreover, it has a five-star rating from Morningstar. My FED+ fair value range for Cisco is between $15 and $23 per share. (Full analysis, here).

I screwed up on that one. This stock [Manitowoc] (MTW) has been left for dead but I would double down.

The Wisconsin-based Manitowoc shows a trailing P/E ratio of -16.4, and a forward P/E ratio of 8.5, as of the October 14 close. Estimated annualized EPS growth for the next five years is 15.0%, which is totally unfair, given the -38.40% EPS growth of past five years. It pays a thin dividend of 0.92%, while the profit margin is -3.4%.

Manitowoc is currently trading 62.51% lower than its 52-week high, whereas it returned -22.2% in a year. Target price is $16.46, which implies a 88.9% upside potential. SMA50 is -3.63%, and SMA200 is -44.13%. Debt-to equity ratio is 4.0, crushed by the industry average of 0.8. ROA, ROE, and ROI are -2.72%, -22.61% and -4.30%, respectively. While operating margin is 6.1%, gross margin is 24.0%. Earnings decreased by 76.86% this quarter. Manitowoc has a terrible Beta value of 2.79. Stay away from it.

Source: 5 Buy And 4 Sell Ideas From Mad Money's Lightning Round