30 Days Later: 5 Jim Cramer Picks

by: Vatalyst

Thirty days ago Jim Cramer made some recommendations on these five stocks and I thought I'd take a look at how they have performed since then.

Allergan Inc. (NYSE:AGN): Last month Jim Cramer recommended that you buy Allergan as the stock was nudging against the $80 mark on its approach to its 52 week high of $85.74. Allergan had just reported its second quarter results and the implications were that the company was clicking on all cylinders. The mean estimate for adjusted net income was $.95 and the company reported $.96, beating it by a penny. Net income rose to $246.6 million or $.79 per share versus $240.1 million or $.78 per share a year earlier, a rise of 2.7%.

This was the second quarter in a row that the company beat estimates and though it may not seem like much, it warrants a closer look. Revenues also rose by 13.6% and have consistently risen over the past four quarters; but more importantly, gross margins have been expanding over the last five consecutive quarters: the company reported a gross margin expansion of 1.6%, having grown on average by 1.4% on a year to year basis. So how did Jim do it? Technically speaking it looks like Jim caught the tail of a classic head and shoulders configuration and the stock has been trending higher ever since. It is currently showing a little resistance at its 52 week high but when the profit takers clear out, it should move even further up.

Chipotle Mexican Grill Inc. (NYSE:CMG): Jim Cramer reiterated his buy rating on Chipotle Mexican Grill Inc. last month, a stock he has been recommending since 2008 when it was trading at a post-crash level of $39 per share. The stock has a 52 week high of $337.32 this year - a return of over 760% in the given time period. In comparison, Jack In The Box (NASDAQ:JACK) has grown from $15 per share to $21 in the same time period: a return of only 40%. Chipotle Mexican Grill has been expanding its operations throughout the United States (where it has done extremely well) and is now starting to test the ever popular international markets.

Chipotle Mexican Grill also has the benefit of Mc Donald’s (NYSE:MCD) experience and supply chain mechanisms in these regions. However, the secret to Chipotle's success is debt, or the lack of it. Unlike most of its competitors, Chipotle Mexican Grill carries no debt and invests its substantial cash flow directly back into the business instead of creditors pockets. Take a look at this article for more information on Chipotle Mexican Grill's debt to equity ratio. So how has the stock performed most recently? Well it seems to be range bound between $280 and $340 per share at this point. Considering the long term trend and the extremely strong fundamentals, there is no reason you should not be accumulating this stock any time it gets under $300 per share.

Carrizo Oil & Gas Inc. (NASDAQ:CRZO): Tensions general to the global economy and specific to the energy sector have cut this stock's value in half since Jim Cramer recommended it one month ago. Now the question is has this created a great buying opportunity? The stock has regained 25% of its lost value over the last week as the latest European debt crisis seems to be coming to a close. With extraneous influences set to rest, let's take a closer look at the intrinsic value of the stock.

The company carries a lot of debt which is one of the inherent risks of a company of this size in this industry. This was probably the catalyst for the dramatic sell off, seeing that debt was the fear-flavor of the month. Carrizo's gross profit margin has increased significantly over the same quarter last year and is currently coming in at 80.5%. The company's quarterly earnings growth is standing at a highly respectable 330% with revenue growth of 53%.

If the company can demonstrate that it is paying off its debt with its increase in revenue, or if the market can come to terms with the fact that debt is a part of doing business in this industry, this stock is quite likely to come back into favor - in spite of the most recent downgrade. When it does, a lot of analysts out there are going to be eating a little Jim Cramer crow.

Darden Restaurants Inc. (NYSE:DRI): A little over a month ago Jim Cramer recommended that you buy stock in Darden Restaurants Inc. and the stock has remained range bound between $40 and $50 per share since then. Does this mean Jim was wrong or he doesn't know what he's talking about? Not necessarily. Instant gratification is rare in the investment world. Shortly after the recommendation, Darden Restaurants Inc. announced the acquisition of Eddie V's Restaurants Inc. - an event that would be expected to bring short sellers out in droves.

But the stock didn't budge. This is possibly due to the fact that, well, it's just hard to short quality. Darden Restaurants Inc. restaurant brands also include Red Lobster, Olive Garden, LongHorn Steakhouse, The Capital Grille, Bahama Breeze and Seasons 52. Darden Restaurants seems to have the secret recipe on restaurant branding and is presently the world's largest full-service restaurant company.

Darden Restaurants currently has a PEG ratio of .96 and an earnings growth forecast of 11.13% and 13.27% over the next couple of years, indicating the stock price is quite low compared to its earnings growth. Sometimes you just have to wait for the results - they don't always come overnight y’ know. Oh, and you need not watch the water while you're waiting for it to boil.

Devon Energy Corporation (NYSE:DVN): Thirty days ago Jim Cramer was recommending stock in Devon Energy Corporation. Since then the stock has fallen from its $70 mark to a low of around $50. It has most recently bounced back to the $65 range, once the market realized its global crisis fears were overblown, as usual. Will an irrational exuberance of greed follow? Most definitely - it's just a question of when. Such is the way of equilibrium. And we, as investors, must decide when to board and exit this rollercoaster ride.

From a technical stand point the ticket line for Devon Energy looks short and the excitement of the ride looks appealing. The stock is just crossing into a new range and should draw the attention of most momentum buyers.

With a PEG ratio of .97 and forecasted earnings growth through the next two years of 17.48% and 26.01%, the fundamental side of the traverse doesn’t look too bad either. For you long-term buy-and-hold investors, keep your legs and arms inside the vehicle at all times, remain seated and hang on. Remember that all things equal out over the long term and keep on watching Jim Cramer - he won't steer you wrong.

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