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Greece has decided to go for a referendum, and markets were totally shocked. I highly doubt that Greek citizens will approve the conditional aid. Even as an optimist investor, the political situation in Greece seems scary to me. Apparently, Jim Cramer also turned bearish on Monday. In October’s last Lightning Round, he made seven calls. There were no bullish calls this time. 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 31 Lightning Round:

Stock Name

Ticker

Cramer's Suggestion

O-Metrix Score

My Take

Activision Blizzard

(ATVI)

Avoid

4.32

Buy After Pullback

Microsoft

(MSFT)

Avoid

7.59

Long-Term Buy

Johnson & Johnson

(JNJ)

Avoid

3.51

Long-Term Buy

Cheniere Energy

(LNG)

Sell

N/A

Sell

MetroPCS

(PCS)

Avoid

10.00

Hold

Kimber Resources

(KBX)

Sell

N/A

Avoid

Nuance Communications

(NUAN)

Sell

0.70

Sell

(Data obtained from Finviz/Morningstar, and is current as of October 31 close. You can download the O-Metrix calculator here.)

Activision

Although Activision has delivered impressive quarterly results, Cramer is still bearish on it, as well as all gaming stocks. The company shows a trailing P/E ratio of 24.3, and a forward P/E ratio of 14.4, as of October 31. Five-year annual EPS growth forecast is 15.5%, which is reasonable given the 13.72% EPS growth of past five years. Profit margin (13.8%) more than doubles the industry average of 6.8%, and it pays a 1.23% dividend.

Activision is trading only 1.90% lower than its 52-week high, while it returned 17.5% in a year. Target price indicates an about 11.3% increase potential, and O-Metrix score is 4.32. Earnings increased by 292.08% this year, and 65.03% this quarter. SMA50 and SMA200 are 9.96% and 16.25%, respectively. Cash flow is doing all right, whereas Beta value is 0.60. Debt-to equity ratio is 0.0, which crushes the industry average of 2.5. Apart from P/S (3.4), there is no red flag in Activision’s key statistics. Gross margin is 57.6%, while PEG value is 1.0. Activision went berserk since mid-August. However, Activision is one of the dominant players in the gaming industry. The stock also high growth potential but a pullback should be waited for before buying.

Microsoft

Cramer does not like Microsoft, and he made the following comment about the company: "Low risk, low reward."

Microsoft has a P/E ratio of 9.7, and a forward P/E ratio of 8.6, as of October 31. Estimated annualized EPS growth is 10.9%. Shareholders enjoyed a 3.00% dividend, while the profit margin was 33.0% last year.

Target price is $31.93, which implies a 19.9% upside potential. The stock is trading 7.88% lower than its 52-week high, and it returned -1.2% in the last twelve months. O-Metrix score is 7.59, whereas Beta value is 0.97. Institutions hold 28.20% of the shares. While SMA200 is 3.22%, SMA50 is 1.98%. Earnings increased by 28.20% this year, and PEG value is 0.8. Debt-to equity ratio is 0.2, which brutally crushes the industry average of 10.6. Gross margin and operating margin are 77.2% and 38.3%, respectively. While ROA is 23.60%, ROE is 44.16%. Moreover, it has a four-star rating from Morningstar. I think Microsoft is one of the safest stocks in the market. It pays okay dividends, and EPS has been growing at a double-digit level. Microsoft is a powerful long-term play. The stock has been under pressure for a while, but at some point investors will realize the value offered by the company (full analysis, here).

Johnson & Johnson

Although Johnson & Johnson has a nifty dividend, Cramer is bearish on this stock as it has “no growth.” It was trading at a P/E ratio of 15.4, and a forward P/E ratio of 12.3, as of October 31. Analysts estimate a 6.2% annual EPS growth for the next five years. Profit margin (18.3%) is higher than the industry average of 15.3%, and shareholders enjoyed a 3.54% dividend last year.

The drug manufacturer is trading 5.74% lower than its 52-week high, while it has an O-Metrix score of 3.51. Target price implies a 12.8% upside movement potential, and it returned -0.4% in a year. Beta value is 0.55, whereas institutions hold 64.79% of the shares. Yields are appetizing. Debts are far from being a threat, and cash flow is doing all right. Debt-to equity ratio is 0.2, below the industry average of 0.8. Gross margin and operating margin are 69.1% and 25.9%, respectively. While ROE is 20.20%, ROI is 15.98%. Morningstar gives a four-star rating to the company. Cramer is quite right about lack of growth, but the company offers great dividends. Given the low-interests offered by government bonds, Johnson& Johnson can be a perfect subsitute for them.

Cheniere

Cramer is pretty bearish on Cheniere, and he made the following comments: "I think you ring the register and let it come in. It [Cheniere] is up on a spike in a very difficult market."

The Texas-based Cheniere shows a trailing P/E ratio of -3.4, as of October 31. It offers no dividend, while the profit margin (-72.3%) is truly hopeless.

Analysts expect the company to have a 4.10% EPS growth next year, and earnings decreased by 143.12% this quarter. Insider transactions have decreased by 45.82% within the last six months, whereas insiders hold 3.57% of the shares. Debt-to assets ratio is at terrifying rates, and ROA is -8.18%. Debt-to equity ratio is 20.3, crushed by the industry average of 1.6. Insiders have been selling stocks for nearly a year. Just sell and regain losses as soon as possible.

MetroPCS

Cramer recommends homegamers avoiding all wireless communications industry right now, including MetroPCS. The company, as of the October 31 close, has a P/E ratio of 13.2, and a forward P/E ratio of 8.5. Five-year annualized EPS growth forecast is 21.7%. Profit margin (5.2%) is well above the industry average of 9.2%, and it pays no dividend.

O-Metrix score is 10.00, while it is trading 58.65% lower than its 52-week high. Target price is $13.57, indicating an about 74.6% increase potential. MetroPCS returned -25.7% in the last twelve months, whereas insider transactions for the last six months have decreased by 94.58%. SMA20, and SMA50, and SMA200 are -11.98%, -18.79% and -44.20%, respectively. Insiders hold only 0.46% of the shares. MetroPCS is in serious debt, and insiders have been mostly selling stocks for some time. It is too late to sell the stock. Holding is the best for now. It might be added to the portfolio if the stock shows signs of recovery,

Kimber Resources

The Mad Money host suggests collecting profits on Kimber Resources. The gold company was trading at a P/E ratio of -34.0, as of the October 31 close. It offers no dividend policy.

Earnings decreased by 39.20% this year, and the stock is currently trading 38.70% lower than its 52-week high. Target price is $2.66, which implies a 100% upside potential. Kimber returned 48.3% in the last twelve months, while Beta value is 1.39. SMA50 and SMA200 are -10.45% and -14.52%, respectively. While ROE is -5.68%, ROA is -5.55%. Kimber is highly volatile, and it is a gold stock besides everything. Stay away from it.

Nuance

Cramer suggests taking the gains and realizing profits when it comes to playing Nuance: "I want to ring the register with these...voice recognition plays...I want to take the gain. "

Nuance shows a sky-high trailing P/E ratio of 181.8, and a forward P/E ratio of 16.8, as of the October 31 close. Estimated annualized EPS growth for the next five years is 14.0%. Profit margin (3.6%) is crushed by the industry average of 12.0%, and it pays no dividend.

Target price is $24.83, implying a 1.9% downside potential. The stock is trading 6.15% lower than its 52-week high, and it returned 63.3% in the last twelve months. O-Metrix score is 0.70, while Beta value is 1.46. Insiders hold only 1.22% of the shares, whereas insider transactions have decreased by 11.20% within the last six months. Operating margin is 5.9%. ROA, ROE, and ROE are 1.18%, 1.96% and 1.43%, respectively. It does not look like a safe stock to own.

Source: Cramer's Black List: 3 Sell And 4 Avoid Ideas