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Last week was a great one for the equity investors. Although the markets started the week with negative returns, they finished in the green territory. Utilities gained the most (2.5%), followed by financials (1.8%), and conglomerates (1.4%). While I haven’t been writing about Cramer’s picks for a short time, I will be writing about his stock mentions regularly again. In the week’s last Lightning Round program, he talked about eight companies, making three bullish and five bearish calls. 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 these stocks from Cramer's October 21 Lightning Round:

Stock Name

Ticker

Cramer's Suggestion

O-Metrix Score

My Take

Aeropostale

ARO

Avoid

5.49

Long-Term Buy

The Jones Group

JNY

Buy

2.43

Avoid

LinkedIn

LNKD

Sell at 90

0.58

Avoid

Tesla

TSLA

Avoid

N/A

Sell

Cimarex

XEC

Avoid

5.28

Buy

EOG Resources

EOG

Buy

4.83

Hold

Timken

TKR

Alternative is Better

10.30

Long-Term Buy

Nucor

NUE

Buy

2.49

Hold

(Data obtained from Finviz/Morningstar, and is current as of October 21 close. You can download the O-Metrix calculator here.)

Cramer rather prefers The Jones Group instead of Aeropostale. Here is a brief comparison between these two companies:

Current as of October 21 close

Aeropostale

The Jones Group

P/E ratio

7.3

49.8

Forward P/E ratio

13.8

7.7

Estimated EPS growth for the next 5 years

11.6%

12.3%

Dividend yield

-

1.70%

Profit margin

6.8%

0.5%

Gross margin

32.3%

33.8%

Upside movement potential

12.5%

26.5%

Aeropostale is trading 50.60% lower than its 52-week high, while The Jones Group is trading 40.30% lower. O-Metrix scores of Aeropostale and The Jones are 5.49 and 2.43, respectively. Aeropostale returned -46.7% in a year, whereas The Jones returned -40.3%. Aeropostale has no debts, and The Jones has its debt-to assets ratio around 25%. Aeropostale is relatively less volatile and should be considered as a long-term play.

While Cramer likes LinkedIn, he believes that it has “had its run.” He recommends selling the stock, should it reach to $90 a share. It was trading at a terrible P/E ratio of 666.7, and a forward P/E ratio of 181.8, as of October 21. Analysts expect the company to boost its earnings by 50.0% in the next five years. It has no dividend policy, while the profit margin (4.4%) is crushed by the industry average of 21.8%.

Target price is $87.00, which implies a 0.7% downside potential. The stock is trading 28.65% lower than its 52-week high, while it returned -7.2% since mid-May of this year. O-Metrix score is 0.58. Cash flow is struggling, and it has a one-star rating from Morningstar. P/B is 21.3, and P/S is 29.2, both of which are way above their industry averages. Operating margin is 6.2%. ROA and ROE are 2.82% and 4.00%, respectively. PEG value is 3.6. Never get close to this stock.

Cramer reiterated his bearish call on Tesla, as “nothing has changed.” It shows a trailing P/E ratio of -13.8, and a forward P/E ratio of -15.3, as of Friday’s close. Five-year annual EPS growth forecast is 20.0%. It offers no dividend policy.

Tesla is trading 23.04% lower than its 52-week high, while insiders hold only 0.23% of the shares. Target price indicates an about 29.2% upside movement potential, whereas it returned 35.2% in the last twelve months. The debt-to assets ratio is unstable, and cash flow is doing terrible. Gross margin and operating margin are 32.7% and -111.9%, respectively. While ROA is -48.89%, ROI is -176.60%. Tesla’s long-term EPS growth estimate is pretty irrational given its past record, so this stock is a must-sell.

When it comes to oil & gas, Cramer rather prefers EOG Resources instead of Cimarex. Here is a brief comparison between these two companies:

Current as of October 21 close

Cimarex

EOG Resources

P/E ratio

10.4

56.8

Forward P/E ratio

9.7

18.7

Estimated EPS growth for the next 5 years

10.0%

35.8%

Dividend yield

0.62%

0.71%

Profit margin

31.6%

5.3%

Gross margin

82.0%

83.0%

Upside movement potential

52.8%

23.9%

Cimarex is currently trading 45.55% lower than its 52-week high, whereas EOG is trading 25.00% lower. O-Metrix scores of Cimarex and EOG are 5.28 and 4.83, respectively. Cimarex returned -11.8% in the last twelve months, while EOG returned -6.9%. Cimarex is slightly less volatile than EOG, and debts are far from being a threat for both of them. Average analyst recommendation is 1.80 for Cimarex, and 2.20 for EOG (1=Buy, 5=Sell). I do not agree with Cramer since I want to play it safe. I rate Cimarex as a buy, and EOG as a hold.

The Mad Money host would rather go with Nucor instead of Timken. Here is a brief comparison between these two companies:

Current as of October 21 close

Timken

Nucor

P/E ratio

10.2

24.7

Forward P/E ratio

8.0

11.1

Estimated EPS growth for the next 5 years

16.8%

5.0%

Dividend yield

1.96%

3.94%

Profit margin

8.4%

2.6%

Gross margin

25.8%

8.0%

Upside movement potential

48.2%

21.7%

O-Metrix scores of Timken and Nucor are 10.30 and 2.49, respectively. Timken is trading 28.79% lower than its 52-week high, whereas Nucor is trading 23.14% lower. While Timken returned -1.4% in a year, Nucor returned -2.9%. Timken’s debt-to assets ratio is going down for the last four years, whereas that of Nucor is going up. Morningstar gives a four-star rating to both of them. I would rate Nucor is a hold, and Timken as a long-term buy.

Source: 3 Buy And 5 Sell Ideas By Cramer